CVFF:Any Bank Interest Rate Higher Than 7.5% Not Acceptable-Jolapamo
Fred Omotara, Lagos
Indigenous shipowners have kicked over the request by commercial banks to charge 8.5 percent on loans for the $350m Cabotage Vessel Financing Fund (CVFF), stating that anything more than 7.5 percent is on the high side.
Speaking exclusively with Kadecommunicationng on Wednesday, Founding President of the Nigerian Shipowners Association (NISA), Chief Isaac Jolapamo said that any interest rate higher than 7.5 percent will be deemed to be too high by indigenous shipowners.
According to Chief Jolapamo, “8.5 percent rate from commercial banks for CVFF disbursement is on the high side depending on what individuals wants to use the money for.
“8.5 percent is on the high side of single digit. What everybody is looking forward to is on the middle side of single digit, which is what is applicable elsewhere. When you say the first quarter of any amount by 10, it’s like you are talking about 25 percent of 10 percent, which is going to be 2.5percent interest rate.
“The middle of the interest rate is 5, so we are looking at something around 7.5 percent. The 8.5 percent is on the high end of the interest rate calculation. It has gone past the three-quarter percentage of 10.
“For the CVFF disbursement, we should be looking at an interest rate between 5 percent and 7.5 percent.
“8.5 percent is okay if it is below 10, but the ideal situation will be based on what individual shipowners is doing with the money. What is the cashflow of each individual ship-owner? These are the considerations that should be looked at when coming up with the interest rate for the CVFF.”