Small Scale Industrial Enterprises Loans Management Committee Law

SMALL SCALE INDUSTRIAL ENTERPRISES LOANS MANAGEMENT COMMITTEE LAW

1. Citation. This Law may be cited as the Small Scale Industrial Enterprises Loans Management Committee Law.

2. Interpretation. In this Law unless the context otherwise requires- “Committee” means the Small Scale Industrial Enterprises Loans Management Committee established under section 3 of this Law; “Government” means the Government of the Delta State of Nigeria; “Governor” means the Governor of the Delta State of Nigeria; “member” means member of the Small Scale Industrial Enterprises Loans Management Committee established under section 3 (1) of this Law and includes the Chairman thereof; “Small Scale Industrial Enterprise” means any manufacturing enterprise in which the capital investment on plant, machinery and equipment excluding land, buildings and working capital is N1,000,000 or less; “State” means the Delta State of Nigeria.

3. Establishment of the Committee. (1) There is hereby established for the State a body to be known as the Small Scale Industrial Enterprises Loans Management Committee. (2) The Committee shall be a body corporate with perpetual succession and common seal and shall have power to sue and be sued in its corporate name and to acquire, hold and dispose of movable and immovable property for the purposes of its functions under this Law. (3) The Committee shall control and manage the Fund established under section 4 (1) of this Law.

4. Membership of the Committee. (1) The Committee shall consist of the following members— (a) the Permanent Secretary, Ministry of Commerce and Industry, Co-operatives and Tourism or his nominee who shall be.................................. Chairman; (b) the Solicitor-General and Permanent Secretary, Ministry of Justice or his nominee........................................... Member; (c) the Permanent Secretary, Ministry of Finance and Economic Planning or his nominee...................... Member; (d) a representative of Federal Ministry of Industries or his nominee........................... Member; (e) a representative of the National Association of Small Scale Industrialists, Delta State............................ Member; (f) a representative of the State branch of the National Association of Small Scale Industrialists; and ....................... Member; (g) a representative from each participating financial institution in the Entrepreneurship Development Programme........................... Member. (2) The Governor may appoint three additional members one from each Senatorial District as he may determine, and the conditions and tenure of such members shall be as stated in the instrument appointing them. (3) Notwithstanding the provisions of subsection (1) of this section, the Governor may appoint other persons as members in addition to the persons named in the said subsection. (4) Where an appointment is made by virtue of subsection (3) of this section, unless the Governor otherwise determines, the tenure of office of such members shall be three years, subject to the, pleasure of the Governor and any such member shall be eligible for re- appointment.

5. Establishment and control of the Fund. (1) There is hereby created for the State a fund to be called the Small Scale Industrial Enterprises Scheme Fund (hereinafter called “the Fund”). (2) The Bankers to the Fund shall be nominated by the Committee. (3) The responsibility of the Committee to control and manage the Fund shall include— (a) the issue of loans and deposit of funds with commercial and merchant banks or other related financial institutions for a percentage on-lending to successful applicants on terms to be approved by the Committee; (b) the recovery of loans granted when they become due; and (c) the development of entrepreneurs.

6. Resources of the Fund. The resources of the Fund shall consist of the following— (a) any grant made to the Committee by the Government directly or by the Federal Government; (b) all sums of money received by the Committee from time to time or falling due to it in respect of the repayment of any loans made by it or the interest payable in respect of any of its funds or loans; (c) any mortgages, debentures, investments or property acquired or vested in the Committee; (d) all other monies or property which may in any manner become payable to or vested in the Committee in connection with its functions or any matter incidental thereto.

7. Remuneration. No member shall receive any remuneration in respect of his services as a member, except that non-official members appointed by virtue of subsection 2 (or 3) of section (4), shall be entitled to receive such remuneration as may from time to time, be determined by the Governor.

8. Notification in the Gazette. Every appointment to and every change in the membership of the Committee shall be notified in the State Gazette.

9. Resignation. A member of the Committee may resign his appointment at any time by sending his letter of resignation to the Governor.

10. Meetings. (1) The Committee shall meet once every two months and at such other times as may be expedient for the transaction of business and such meetings shall be held at such places and times and on such days as the Committee shall determine. (2) The Chairman may at any time call special meetings of the committee and shall do so on being requested in writing by at least one-third of the total membership of the Committee. (3) The Chairman shall preside at all meetings of the Committee at which he is present and if he is absent, the members present at the meeting shall select one of their number to preside thereat. (4) The Chairman or the member presiding at a meeting of the Committee in his absence, shall have an original and a casting vote. (5) Five members of the Committee shall form a quorum. (6) All questions at meetings shall be decided by a majority vote of the members present.

11. Power to co-opt. Where, on any special occasion, the Committee desires to obtain the advice of any persons Upon any matter, the Chairman may co-opt such persons not exceeding two in number; and at such meetings such persons shall have all the rights and privileges of members save that they shall not have the right to vote.

12. Functions of the Committee. (1) The functions of the Committee shall include the provision of loans and deposit funds with financial institutions for percentage on-lending, for the establishment, expansion, or modernisation of small scale industrial enterprises. (2) Without prejudice to the generality of the foregoing, the Committee shall in particular consider and approve applications for loans in respect of enterprises set out in the Schedule to this Law. (3) The Committee shall not— (a) approve any loan for non-manufacturing enterprises such as dairying, poultry farming, piggery and horticulture; (b) grant any loan to be used to finance outstanding loan commitments; (c) approve any loan to civil servants, statutory boards and corporations and local authority employees, employees of Government evened companies and members of the Armed Forces including the Prison Service; (d) grant any loan to any industrial enterprises which do not fall within the category of small scale industrial enterprises as defined in section 2 of this Law. (4) All applications for loans shall be in such form as the Committee shall prescribe.

13. Terms and conditions of loans. (1) The Committee before approving any application for a loan shall— (a) satisfy itself as to the technical and/or managerial ability of the applicant to implement the project; (b) require the applicant to prepare and submit to it a project feasibility study giving estimates of the total project cost, operating cost, marketability of the product, expected profitability and break-even point of the project; (c) where necessary, arrange for the project site to be inspected and evaluated; (d) satisfy itself that all property owned and used by the applicant together with those used to secure the loan are insured against loss by fire with an insurance company acceptable to the Committee; (e) make direct payment to the suppliers of plant, machinery and equipment in respect of such plant, machinery and equipment ordered by the applicant against the loan granted to him by the Committee. (2) The applicant for a loan for the purpose of expanding or modernising an existing enterprise shall— (a) permit the investigation of his enterprise by an official appointed by the Committee; and (b) produce to him all documents that may be required for that purpose. (3) In the case of a new enterprise the applicant shall make available to an official appointed by the Committee— (a) all information regarding the estimated cost of equipment and buildings; (b) all information on the process to be carried out; (c) an assessment of the marketability of his products; and (d) such other relevant information as the officer may require. (4) The borrower shall— (a) agree to the supervision of the utilisation of the loan in such manner as may be determined by the Committee; (b) permit inspection of his business and books of accounts by an official designated by the Committee; and (c) accept or act upon the advice given by officials of the Committee. (5) The borrower shall contribute from his own resources at least 25 percent of the total cost of the project either in cash or in assets to be used in the implementation of the project and shall use the loan exclusively for the purpose for which it is given. (6) The borrower shall repay the principal in such instalments and at such intervals as the Committee shall determine and he shall also pay the interest on the outstanding loan or credit at such intervals as the Committee shall determine. (7) The borrower shall at all times maintain proper records to show the true financial position of the enterprise. (8) The Committee may instruct the borrower to keep the records of transactions in a prescribed manner and, if so advised, the borrower shall comply with the instructions.

14. Failure to comply with the terms and conditions. (1) If- (a) the borrower fails to utilise the loan in the manner required by the Committee; or (b) there is in the opinion of the Committee a threat to the security of the loan, then the balance of the loan and the interest thereon outstanding shall immediately become due and repayable forthwith. (2) If the borrower fails to repay any instalment of the loan or any interest thereon within one calendar month of the date upon which such instalment or interest becomes payable, the Committee may at its discretion recall the loan and thereupon the balance of the loan and interest thereon outstanding shall immediately become due and repayable.

15. Security for loans. The Committee may prescribe any form of security that it deems adequate to ensure the safety of any loan granted from the Fund.

16. No loan for construction of workplace. No loan shall be used to finance the construction of a work place unless— (a) the change includes the installation of new machinery; (b) it is certified by an agent of the Committee that the present workplace is unsuitable for the process carried on; (c) the applicant is obliged under any enactment to move' from a nonconforming to a conforming area; or (d) in a case falling under paragraph (c) above, the Committee exercises a discretion permitting a portion of such loan to be spent on the erection, modification or extension of the workplace.

17. Loan for purchase of load-carrying vehicle. The Committee may grant a loan for the purchase of load-carrying vehicles if such vehicles are necessary for the efficient undertaking of the business of the borrower.

18. Interest rate. (1) The rate of interest to be charged shall be 5 percentage points below, the minimum lending rate specified by the Central Bank of Nigeria. (2) The period of repayment shall be determined by the Committee with regard to the amount of loan. (3) The repayment of loan shall be spread over a period not exceeding five years.

19. Period of grace. The Committee may at their discretion allow a period of grace of one to two years from the commencement of production for the repayment of the first instalment of the loan depending on the nature of the project.

20. Maximum loan to be granted. (1) The maximum loan to be granted and or maximum deposit by the Committee shall not exceed one hundred and fifty thousand naira. (2) The Committee may also approve an additional loan of twenty percent of the amount granted as working capital where any loan is made under subsection (1) of this section.

21. Fund Secretariat. (1) The Committee shall establish a Secretariat for the Fund within the Ministry of Commerce and Industry, Co-operative and Tourism and the Secretariat shall be financed by the Government of the State. (2) The Secretariat of the Fund shall— (a) be headed by a Chief Industrial Officer of the Ministry who shall also be the Executive Secretary of the Committee; and (b) consist of four sections namely— (i) administrative; (ii) accounts; (iii) project monitoring; and (iv) entrepreneurship development.

22. Exemption from stamp duties and registration. No stamp duties or registration fees under the provisions of the Stamp Duties Law and the Land Instrument Registration Law respectively shall be payable in respect of— (a) mortgage or other documents for securing a loan granted by the Committee; (b) a document discharging any such mortgage, security or charge.

23. Annual report. The Committee shall at the end of each financial year submit to the Governor a report in such form and containing such particulars as the Governor may from time to time direct, dealing with the activities of the Committee during that financial year.

24. Accounts. (1) The Committee shall within three months of the end of each financial year prepare and submit through the Permanent Secretary, Ministry of Commerce and Industry, Co- operative and Tourism annual accounts of the Fund to the Auditor-General of the State for examination. (2) A copy of the certified annual accounts of the Fund and the audit report thereon together with a copy of the annual report on the operation of the Fund shall be forwarded to the Permanent Secretary, Federal Ministry of Industries.

25. Protection of officers. No member, officer or agent of the Committee shall be liable for any act done or omitted to be done, in good faith, in the normal course of performing any official duties assigned to him by the Committee under this Law.

26. Offences and penalties. An applicant for loans under the Law who— (a) makes to the Committee any material statement which he knows to be false or does not believe to be true with the intent to defraud; or (b) fails to disclose to the Committee, with intent to defraud, material information within his knowledge, shall be guilty of an offence and shall be liable on conviction to a fine of one thousand naira or to imprisonment for six months or both. SMALL SCALE INDUSTRIAL ENTERPRISES LOANS MANAGEMENT COMMITTEE LAW [Section 12 (2)] Approved small scale industries include --

2. Small scale industries sited in the rural areas using local raw materials.