Looking For Bank Of Industry Loan? Take Your Choice!

The Bank of Industry (BOI), Nigeria’s oldest and highly successful development financial bank, is owned by Ministry of Finance (94.80%), Central Bank of Nigeria (5.19%) and private investors (0.01%). BOI emerged from the re-organisation of the Nigerian Industrial Development Bank Limited in 2001.

BOI has the Bank of Industry Trust Company, Bank of Industry Microfinance Bank, Bank of Industry Insurance Brokers Limited and LECON Limited as its subsidiaries. Funding options available to practising and aspiring entrepreneurs include, but are not limited to the following:

1. Youth Entrepreneurship Support Programme: The Youth Entrepreneurship Support (YES) Programme is BOI’s effort to address youth unemployment by equipping young people who have innovative ideas with the skills, knowledge and funding to start and manage their own businesses. The programme targets aspiring entrepreneurs who are between ages 18 and 35 years, and have a minimum educational qualification of Ordinary National Diploma (OND).
Participants undergo eight weeks and five days of online and in-class entrepreneurship and business management training covering business idea, business model, sales and marketing, financial planning and running a successful business.

The scheme seeks to develop participants’ bankable business plans that fit the BOI small and medium enterprise clusters or expand their existing businesses, with options of equity contribution from BOI and/or loans of up to N5 million. Interest rate is nine percent per annum with one percent processing fee. The tenor of three to five years allows six months moratorium from date of disbursement. The loan is secured by the following:

  1. Debenture over the assets of the business or specific charges over its present and future equipment.
  2. Deposit of originals of NYSC certificate and Ordinary National Diploma, Higher National Diploma or University Degree with Bank of Industry.

iii. Two guarantors acceptable to Bank of Industry.

2. Cottage Agro-Processors (CAP) Fund: BOI created the Cottage Agro-Processors (CAP) Fund to boost the capacity of cottage agro processing plants to produce food products and industrial raw material for industries within and outside the Staple Crop Processing Zones (SCPZ) across Nigeria.

The Cottage Agro-Processors Fund aims to finance not fewer than 1,000 projects, by advancing credit at interest rate of nine percent, management fee of one percent, with a tenor of five years and six months moratorium.

Incorporated small and medium enterprises, and registered co-operative societies engaged in production and/or processing of such agricultural products as cassava, rice, groundnut, cashew, oil palm, plantain, sorghum, yam, fisheries, livestock, cocoa, shea nut, maize, tomato, etc. can access the CAP Fund. Producers or processors of derivatives in the forms of raw materials or finished products for local industries or export can also access the Fund.

3. Nollywood Fund: Nollywood, adjudged by contents production as ranking third in the world, after Hollywood in the United States and Bollywood in India, is a key contributor to the nation’s Gross Domestic Product. BOI, recognising access to finance and distribution channels like cinemas and DVD/CD as challenges for the Nigerian Creative Industry, established the Nollywood Fund to deepen credit to the sector.

The N1 billion NollyFund targets enterprises engaged in the film production value chain from pre-production to post-production, and lends up to N50m to borrowers. The interest rate of 10 percent, payable monthly, includes processing and commitment fees of one percent each; plus quarterly monitoring fee of 0.125% of outstanding Principal.

Maximum tenor of the term loan is 12 months, from end of moratorium of six to nine months, after loan disbursement date. Collateral and funding requirements are:

  • Assignment of copyright to Bank of Industry.
  • Personal Guarantees of Producer and a reputable individual acceptable to Bank of Industry.
  • Minimum Guarantee of Distributor to cover value of project, plus interest on the loan amount.
  • Undertaking of Distributor to remit cinema proceeds of the film to designated bank, per agreed arrangement, with Bank of Industry as sole signatory on the account.
  • Security deposit of five percent of the loan amount by the Distributor.
  • Letter of Referral from a recognised organised private sector Association, Group or Guild.
  • Equity contribution of 20 percent of production cost by the Producer.

4. Fashion and Beauty Fund: The fashion industry runs along two broad lines: Design and production, and sale and distribution. While there is a shortage of sales platforms, the creative side is robust with designers producing ready-made and mass produced clothes.

The Bank of Industry Fund is designed for registered enterprises and co-operatives in the fashion and beauty value chains, namely:

  • Adire and Aso-Oke.
  • Design and Production of Clothing.
  • Fashion and Beauty Training Institutes.
  • Distribution and Retailing.
  • Beauty Salons.

The fund, to be used for acquisition of equipment, consumables and working capital, is disbursed not to exceed the following categories and amounts: Micro enterprises and Co-operatives (N10 million), Small enterprises (N50 million) and Medium enterprises (N200 million).

Interest rate is nine percent per annum, with one percent processing fee. Tenor is three to five years, with moratorium of up to 12 months from disbursement date. The loans, depending on the borrowing entity, will be secured as follows:

  1. Co-operative Society
  • Joint and several guarantees of members of the Co-operative society.
  • Personal guarantees of the President and Secretary of the Co-operative Society.
  • Personal guarantees of the President and Secretary of the Co-operative Society.
  • Two guarantors who are not members of the Co-operative Society and acceptable to Bank of Industry.
  • iv.10 percent contribution of the loan amount.
  • Lien over present and future stock of trade.
  • Asset debenture on equipment finance.
  1. Micro and Small Enterprises
  • Asset debenture over financed equipment.
  • Irrevocable Personal Guarantee of Chief Promoter (s) of the business.
  • Two guarantors who are not shareholders of the business and are acceptable to Bank of Industry.
  1. Medium Enterprises
  • Legal mortgage on pledged property or bank guarantee from commercial banks acceptable to Bank of Industry.
  • Irrevocable Personal Guarantee of Chief Promoter of the business or debenture on assets of the business.

A start-up business is expected to contribute a minimum of 30 percent of the loan amount while assets of existing businesses may count as equity contribution of the borrower.

A Micro, Small, Medium Enterprise, Co-operative, Graduate or Youth Corps Member wishing to access a loan at Bank of Industry must register at https://www.boi.ng/apply/register.

The requirements for application for Bank of Industry loans vary according to the fund to be accessed. However, the basic procedure includes providing the following:

  • Letter of application.
  • Copy of certificate of incorporation or registration.
  • Business Plan.
  • Proof of collateral for the loan.
  • Passport photograph of sponsor(s).

The funds available at BOI uniquely position it to realise its mandate of promoting industrialisation, through capacity building for entrepreneurs, support of their businesses with loans and working capital, and creating employment opportunities.

Do you need help to access Bank of Industry funding for your business? Contact Us Now or email ted.iwere@smefinance.org