By Abdul Rahman Aliagan
The Bank of Industry was restructured in 2001 to provide renewed vigour and pragmatic approach to aggressively stimulate the Nigerian economy in order to transform her industrial sector in order to place it in good stead in a competitive global economy.
The bank that was carved out of the defunct Nigerian Industrial Development Bank (NIDB) Limited, which was incorporated in 1964, is today waxing stronger and justifying the essence for which it was restructured.
To be sure, the institution has continued to live up to its billings by providing financial and business support services to existing and new industries to attain modern capabilities to produce goods that are competitive in both domestic and external markets.
No doubt, the restructuring exercise has given efficacy and potency to the institution and it is strategically positioning Nigeria’s economy for the needed growth and development, particularly the industrial sector of the nation’s economy.
It is instructive to note that the financial institution that started with N50billion authorized share capital at the inception of NIDB’s metamorphosis into BOI in 2001 has been increased to N250 billion in order to address the nation’s rising economic profile.
Following a successful institutional, operational and financial restructuring programme embarked upon in 2002, the bank transformed into an efficient, focused and profitable institution that is well placed to effectively carry out its primary mandate of providing long term financing to the industrial sector of the Nigerian economy.
Without losing focus of its vision, BOI has attained the status of Self-sustaining Development Finance Institution operating under sound management and banking principles aimed at promoting the emergence and development of a virile competitive industrial sector in Nigeria.
BOI has continuously providing financial assistance for the establishment of large, medium and small projects as well as expansion, diversification and modernization of existing enterprises; and rehabilitation of ailing industries, emphasising on prudent project selection and management as it supports quality projects with potential developmental impact.
In achieving its lofty goals, BOI focuses on industries that meet the capacity to substantially add to industrial output, projects that use largely domestic raw materials and industry in which Nigeria’s comparative advantages could be converted to competitive ones.
It is also attracted by the ability to promote the expansion of exports through the production of high quality products that are attractive to domestic and export markets as well as projects that produce for worldwide consumption, promoting domestic and regional economy as well as inter-state and regional integration.
The bank also lays more emphasis on Small and Medium Enterprises (SMEs) that have linkage with large firms, belong to clusters and operate under franchise with high employment generation capacity, technically feasible, commercially viable and economically desirable, environmentally friendly, good management set-up and proper accounting procedures as well as an enterprises promoted by women entrepreneurs.
In the conduct of the bank’s business, professionalism, excellence and integrity has continued to take a centre-stage. With this, BOI has built a formidable long term partnership with clients, based on shared responsibilities for the success of enterprises and equitable commitment to the prosperity of all stakeholders. The bank is always there to support enterprises with profitable potentials, competitive, sustainable and substantial developmental impact.
The BOI has continued to assist projects to generate considerable multiplier effects such as job creation and poverty alleviation, both of which invariably enhance the social and economic condition of Nigerians.
As part of its statutory mandate, BOI is eminently positioned to manage foreign grants and aids that are given to facilitate attainment of the nation’s developmental aspirations such as the National Economic Empowerment and Development Strategy (NEEDS), the realization of the Federal Government sustainable pro-employment of 10% economic growth rate per annum and the Millennium Development Goals (MDGs).
BOI is equally working round the clock to key into the new Sustainable Development Goals (SDGs) among many other Federal Government programmes aimed at facilitating employment and stimulating economic growth and development in the country.
The bank has designed so many programmes that could result into transformation of Nigeria’s industrial sector, with special reference to young entrepreneurs and among these is Young Entrepreneurship Support Programme (YES) which is aimed at equipping young people with skills and knowledge to be self-employed by starting and managing their own businesses.
There are also the State/BOI Funds and Dangote Foundation initiatives which provide matching funds based on partnership between BOI, some state governments and Dangote Foundation. The funds are being accessed by cooperatives, enterprises and limited liability companies engaged in manufacturing and agro-processing, with single obligor limit of N50 million. Interest rates range from between 5% and 10%.
The BOI equally manages funds such as the N235 billion CBN intervention fund for manufacturing re-financing and restructuring facilities of banks’ loan.
This is aimed at fast-tracking the development of the manufacturing sector of the Nigerian economy by improving access to credit for manufacturers, improve the financial position of the Deposit Money Banks (DMBs) as well as increase output, generate employment, diversify the revenue base, increase foreign exchange earnings and provide inputs for the industrial sector on a sustainable basis.
There is also the N300 billion CBN Power and Airline Intervention Fund (PAIF) designed to reengineer the development of electric power projects, especially in the identified industrial clusters in the country, development of the aviation sector of the Nigerian economy by improving the terms of credit to Airlines; improve power supply, generate employment, and enhance the living standard of the citizens through consistent power supply; provide leverage for additional private sector investments in the power and aviation sectors.
To boost the development of Cassava Bread and agribusiness in general, the Federal Government created a fund being managed by BOI to stimulate the transformation policy in the agribusiness sector, to ensure that Nigeria becomes the largest cassava processor having occupied the position of largest producer of the commodity in the world, and guarantee the reduction of food import bills.
A number of measures including the cassava bread policy were endorsed by the Government.
Government’s intervention in the Cassava Value Chain by funding Cassava processors and bakers, it is said, would translate to foreign exchange savings and job creation along the cassava value chain and also prevent post-harvest losses.
BOI has equally been managing some funds, particularly the Federal Department of Agriculture (FDA) Cottage Fund where Federal Ministry of Agriculture and Rural Development (through the Federal Department of Agriculture (FDA)) and the Bank of Industry (BOI) Limited are the implementing agencies for the scheme. The Memorandum of Understanding (MOU) designated BOI as the Fund Custodian and Administrator. BOI has the responsibility of fund disbursement, implementing and monitoring the projects as well as recovering the loan and interest therefrom.
There is also the Special Intervention Fund for MSMES , National Enterprise Development Programme, a Federal Government initiative to provide subsidized loans to Micro, Small and Medium Enterprises (MSME) at single digit (9% per annum) all inclusive interest rate.
The Fund is also to cater for applications received from SMEDAN under the National Enterprise Development Programme (NEDEP) Scheme. The implementing agencies for the scheme are the Federal Ministry of Agriculture and Rural Development (through the National Programme on Food Security (NPFS).
The Rice and Cassava Intervention Fund has defined hallmarks to be utilized solely for the establishment of ten (10) medium scale Rice Mills of about 36,000 metric tons of paddy per annum and six (6) High Quality Cassava Flour Mills of about 18,000 metric tons of cassava tubers per annum capacity in identified locations across the nation.
The sites are Kano, Kogi, Kebbi, Zamfara, Bayelsa, Bauchi, Benue, Ogun and Anambra States for the Rice Mills and Ondo, Ogun, Abia, Delta, Nasarawa and Cross River States for the High Quality Cassava Flour Mills.
The sole objective of the initiative is to create jobs and stimulate economic empowerment of the Nigerian populace, promote foreign exchange savings for the nation as well as boost agricultural activities.
The Federal Government, in furtherance of its policy on sugar development, instituted the National Sugar Development Council (NSDC) Fund for the establishment and resuscitation of companies engaged in the production of sugar, ethanol and sugar cane.
The MOU between BOI and the National Sugar Development Council was signed on November 6, 2009.
The Fund was established to support the development of the value chain through local inclusion to reduce the nation’s dependency on imported refined sugar.
BOI is collaborating with the National Automotive Council (NAC) to intervene in the automobile sector to develop Small, Medium and Micro-Enterprises (SMEs) by supporting them in the area of production of automotive parts, components and services in order to create an enabling environment to allow existing assembly plants to grow and attract other OEMs to the country and increase local content participation in Vehicle Assembly
The Fund is expected to be accessed by limited liability companies and enterprises engaged in assembly of automobiles, automotive component manufacturers, automotive workshop and car service centers, micro-finance banks and other financial institutions for the implementation of Vehicle Purchase Credit Scheme and on-lending to automobile artisans, craftsmen, auto-technicians and mechanics.
The government is committed to sustaining the production of indigenous textiles that are unique to Nigeria and can be showcased in any part of the world. This is also being done through the instrumentality of the bank.
This will be a major source of job creation, especially in the areas where they are produced. For instance, some adire makers employ fine artists that specialize in making patterns on prints, and fashion designers who specialize in creating new fashion styles with the fabrics.
The need to modernize the production processes for Adire and Aso-Oke in order to improve their quality and make them globally competitive.
The product program will facilitate access to finance for practitioners in the production of Adire and Aso-Oke to enable them acquire modern equipment for the enhancement of their efficiency.
The Bottom of the Pyramid (BOP) Scheme is an on-lending scheme using the services of Microfinance Banks (MFBs) as vehicle for credit delivery to the under-served and under-banked micro-entrepreneurs. The BOP Scheme is essentially aimed at poverty reduction through job and wealth creation focusing on the rural micro-enterprise operators with a view to extending financial inclusion to them.
The fund shall be provided wholesale on agreed terms to MFBs to be on-lend to micro enterprises at the BOP for propagation of value addition activities in various sectors of the economy.
An estimated minimum of 40,000 direct and 120,000 indirect jobs (totalling 160,000) are expected to be created at an average loan size of N250, 000. 00 per ultimate obligor.
Block moulding, cottage agro processing fund, cosmetic and beauty care products fund, fashion fund, furniture product programme, fish farming and processing fund, Nollyfund, Graduate entrepreneurship fund, mechatronics, theme park, leather foot wear, waste recycling and quick service restaurant all encompassed in the package.
