Bank of industry loan

The Bank of Industry Limited (BOI) is Nigeria’s oldest, largest and most successful development financing institution. It was reconstructed in 2001 out of the Nigerian Industrial Development Bank (NIDB) Limited, which was incorporated in 1964. The bank took off in 1964 with an authorized share capital of 2 million (GBP).

The International Finance Corporation which produced its pioneer Chief Executive held 75% of its equity along with a number of domestic and foreign private investors. Although the bank’s authorized share capital was initially set at N50 billion in the wake of NIDB’s reconstruction into BOI in 2001, it has been increased to 250 billion in order to put the bank in a better position to address the nation’s rising economic profile in line with its mandate.

Following a successful institutional, operational and financial restructuring programme embarked upon in 2002, the bank has 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.

Eight (8) things you should know before you commence your application on this platform

1. Mandate
   The bank of industry targets businesses that engage in manufacturing and processing activities. Target sub-sectors include Agro-processing, Solid Minerals, Information Technology, Oil and Gas and Creative Industry.
2. Entities that BOI Finances
   Bank of industry only finance enterprises or companies and not an individual person or group of persons. The company / enterprise must be duly registered and you will be required to provide the registration number for a Limited Liability Company or business name for an enterprise before you can proceed with your application.
3. Items that BOI can finance
   The bank is principally set up to finance industrial equipment used in manufacturing. The Bank does not finance land and building which are expected to be financed from equity. You can also access your working capital requirements from any of the ten SME friendly banks that Bank of Industry partners with at Monetary Policy Rate plus 6%.
4. Mode of disbursement
   The bank does not disburse the loan to the borrower in cash but to the vendors and suppliers of the equipment that the loan application is for.
5. Amount that can be financed by BOI
   BOI’s loan support to the SME starts from N5 million. However, loan below N5 million are provided on their matching fund platform which is operated in collaboration with various state governments and on their Bottom of the Pyramid (BOP) scheme which is operated through MicroFinance Banks.
6. Collateral requirements
   As part of the fiduciary responsibility in managing funds under its care, Bank of industry requires that you pledge some assets to secure you loan. However, the Bank also accepts other forms of security subject to adequate coverage of the loan being provided to you. Types of security the Bank accepts include:

• Legal mortgage on a landed property. The property must be duly registered with a Certificate of Occupancy
• Debenture on assets of the company
• Bank Guarantee
• External Guarantors with Notarized statement of Net worth for loans below N10 million.

Please note that the Bank is willing to share assets previously pledged to other lenders provided the Bank’s loan is adequately covered in the arrangement. Also note that the Bank is willing to accept third party collateral.

7. Startup businesses
   While the Bank under its general risk acceptance criteria requires a prospective borrower to have at least three years acceptable performance track record, it can also lend to start-ups at its discretion and on a case-by-case basis. A startup would need to provide proof of cognate experience in its business area and would need to have a highly qualified management and operational team with sound management structure.
8. You need to support your application with some documents

Please find out the documents you will be required to provide as you apply for the loan with the bank using their platforms. This enables you to be prepared and make your application process easier and quicker.