Business ‘Banks benefited more from aviation fund’ - Meggison - The Nation

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President, Institute of Safety Professionals of Nigeria (ISPON), Captain Nogie Meggison, also President and CEO, JEDAIR, in an interview with Assistant Editor, Investigations, Joke Kujenya gives fresh perspective on the much hyped Central Bank of Nigeria’s (CBN) aviation intervention fund.

Let me start on a jocular note and ask where is the aviation intervention fund? And if you know its whereabouts, how many airlines have actually been able to access it?

Yes, the aviation intervention fund (AIF), or put correctly, the Power and Aviation Intervention Fund (PAIF), as we all know, was implemented or meant to be given to airline cum power sector. From what we are gathering, and for the records, it was before my time as the chairman, ISPON, because I came in November 2013, there was N300billion given out. Out of this whole sum, about eighty-something billion was given to aviation. But the truth is that the AIF was not given directly to the aviation sector. It was more of an intervention fund for banks to wade through the stormy waters during the banking crisis days, to cushion the banking debts. There were some airlines owing the banks, so the money was put out by the CBN to bolster the banks’ portfolios so they wouldn’t go under. So, what the CBN did was to refinance those airlines that had bad debts with some banks. In refinancing the bad debts of these banks, because the interest was then at about 25 or 28 percent, the government decided to intervene by reducing the bad loans from accelerating at 25 or 28 percent interest rates yearly, to eight percent, annually. It is not that the loan was written off, but instead of it being multiplied yearly with high interest margins, the AIF was put in place to mitigate the banks’ exposure to being badly affected.

Click here to read the rest of this interview

Source: The nation
 

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