Cooperative Development Fund Guarantees Access to Long-term Investment Finance –Agency

The National Financing Agency of Nigeria (CFAN) said subscription to the new Cooperative Development Fund (CDF) will ensure access to long-term investment finance for cooperators.
The Executive Secretary of CFAN, Mr Emmanuel Agama, told NAN in Abuja yesterday, that the fund would also ensure access to affordable and single-digit interest loans for cooperatives and members.
Atama, said the CDF which has began operation would lend to its subscribers at five per cent interest rate.
He said that CFAN had partnered with Sterling Capital as a fund manager to warehouse the fund.
He said that no fewer than 25 cooperative societies had subscribed to the fund.
According to him, there is need for cooperatives to have their own fund in place because the CDF will be a secondary funding for cooperatives.
He said that most attempts by cooperatives to to access external funding had led them to banks which ended up not supporting the cooperative original model of affordable access to finance.
”The Cooperative Development Fund (CDF) is to be subscribed to by cooperatives, by bringing their contributions.
”Most cooperatives today do not have any investment anywhere, whatever comes to them, they give it out as loan to their members.
”When there is an issue, they will need their members to pay back the money before they can even have money to run the activities of the cooperative.
”But in a situation where they are contributing to the fund, which means they have something to fall back to at any time,” he said
Atama said the fund could also stand as a guarantor for its subscribers to access housing finance at the Federal Mortgage Bank.
”Within the money market today, we discovered that the banks are lending at 28 to 34 per cent.
”Cooperatives are not finding it easy because they are still lending at single digits.
”The fund will now be the only means to sustain that single digit lending and then the ease at which they are going to get the money cannot be compared to what is happening within the money market,” he said.
The executive secretary urged cooperatives that were yet to subscribe to the fund to do so for greater and viable business impact and benefits to their members.