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Business News of Wednesday, 1 August 2018

Source: classfmonline.com

1D1F: Government absorbs 50% interest rate charges

The government has said it has decided to absorb half of the interest rate charges on loans taken by companies venturing into the One District-One Factory programme.

“The government will absorb 50 per cent of the interest rate on this 1D1F companies so that determining what is bankable will be done by the professionals.

“When you have been appraised, you have been shortlisted, you have qualified, the cost of money to you will be shared between the government and yourself; we’ll subsidise the interest rate, by doing that you are allowing the professionalism to take its course and you are making money cheaper for manufacturing”, Senior Minister Yaw Osafo-Maafo said at the Graphic/Stanbic Breakfast Meeting on Tuesday, 31 July.

He said a total of GHS2,648,000,000 has been allocated by six banks to support government’s One District-One Factory policy.

The government aims to put up 216 factories through the policy across the country through the policy.

So far the Ministry of Trade and Industry has received 781 expressions of interest, out of which 632 have been reviewed with 332 currently being processed for financial support.

Fifteen projects, according to Mr Osafo-Maafo, have been approved for implementation under the 1D1F policy.

“And we are happy to say that a number of banks have shown keen interest and support”, the Senior Minister said, adding: “We expect that by the end of this year, 50 of those which have been appraised will be in production”.

“GCB Bank has agreed to make available to support the 1D1F, GHS1 billion, UBA has agreed to support with GHS880 million, ADB – GHS200 million, Exim Bank – GHS103 million, UMB – GHS440 million, SGSSB – GHS25 million. We continue to count. Other banks are discussing with us.

“These support will be appraised by the banks themselves. It’s not the government that will impose the disbursement of these monies on the projects.

“The projects will have to be appraised by the banks and let them be bankable by the definition of the various banks because the 1D1F is all in the domain of the private sector, it is not in the domain of government”.