In a significant move to address rising transportation costs following oil subsidy reforms, the Ministry of Finance Incorporated (MOFI), alongside key stakeholders, has launched the Credit Access for Light and Mobility (CALM) Fund. The N10 billion credit initiative aims to support Nigerians in converting their vehicles to Compressed Natural Gas (CNG), offering a more affordable and eco-friendly alternative.
The CALM Fund is a collaboration between MOFI, the Nigerian Consumer Credit Corporation (CREDICORP), and the Presidential Initiative on Compressed Natural Gas (Pi-CNG). Dr. Armstrong Takang, Managing Director of MOFI, stressed that the initiative was developed to cushion the effects of the oil subsidy reforms, which have significantly increased transportation costs.
“One of the unintended consequences was the cost of transportation which spiked over the last several months, creating a lot of challenges for many families who were finding it difficult to move around,” Takang said.
Loan Access for Vehicle Conversion
The CALM Fund provides Nigerians with access to loans to finance CNG conversion kits and energy-saving solutions. These loans will be available through Participating Financial Institutions (PFIs).
“We are setting aside a fund that will allow Nigerians specifically to access credits to convert their vehicles to CNG with a one to three years repayment duration,” said Mr. Uzoma Nwagba, Managing Director and CEO of CREDICORP.
CREDICORP has committed N2.5 billion to seed the fund, offering loans with interest rates between 15% and 20%, depending on the borrower’s creditworthiness. Nwagba explained that interest rates would be tailored to the borrower’s financial behavior, earnings, and previous repayment diligence.
CNG Conversion and Environmental Benefits
The Presidential Initiative on CNG (Pi-CNG) will support vehicle conversions by providing authorized conversion centers and discounted packages for those using CALM loans. According to Sir Michael Oluwagbemi, CEO of Pi-CNG, this initiative aligns with President Bola Tinubu’s vision to ensure Nigerians have access to affordable, eco-friendly fuel options.
“The need for Nigerians to be mobile and enjoy affordable, eco-friendly fuel and reliable transportation made President Bola Tinubu introduce the Pi-CNG program,” Oluwagbemi remarked.
He further highlighted that the partnership with CREDICORP would enable private individuals to access the necessary credits for CNG conversion, ultimately reducing their dependency on costly traditional fuels.
With the introduction of the CALM Fund, Nigerians are encouraged to apply for loans through participating financial institutions to convert their vehicles to CNG. This initiative presents an opportunity to reduce transportation costs while embracing a greener, more sustainable fuel alternative. Interested applicants can apply online at http://credicorp.ng/apply, while accredited Pi-CNG conversion centers will actively market their services.
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