The Cooperative Financing Agency of Nigeria (CFAN) has said that subscription to the newly established Cooperative Development Fund (CDF) will give cooperatives and their members easier access to long-term, low-interest financing.
Speaking with the News Agency of Nigeria (NAN) in Abuja on Tuesday, CFAN’s Executive Secretary, Mr. Emmanuel Agama, explained that the fund has already commenced operations and will lend to subscribers at a five per cent interest rate.
He noted that CFAN partnered with Sterling Capital as the fund manager, adding that at least 25 cooperative societies have already subscribed.
According to Agama, the initiative was necessary because many cooperatives struggle to obtain affordable external financing, often turning to banks whose lending models do not align with the cooperative principle of low-cost credit.
“The Cooperative Development Fund is meant to be a secondary funding source for cooperatives. With contributions pooled into the fund, cooperatives will have something to fall back on at any time instead of depending solely on members’ repayments before meeting their financial obligations,” he said.
Agama further stated that the CDF could serve as a guarantor for subscribers seeking housing finance from the Federal Mortgage Bank.
He stressed that while commercial banks currently lend at rates between 28 and 34 per cent, the fund would sustain single-digit lending, making credit far more accessible and affordable for cooperatives.
He urged more cooperatives to subscribe to the CDF to strengthen their operations and deliver greater benefits to their members.