Post by Trade facilitator on May 2, 2017 13:21:33 GMT 1
The Bank of Industry (BOI) has stepped up efforts to develop Micro Small and Medium Enterprises (MSMEs) so as to boost the country's economic growth. Giving an insight on how SMEs can access its facilities, Bol's acting Managing Director, Mr Waheed Olagunju, said the bank's objective is to re-examine the strategy or to further curb the challenges hindering the MSMEs in the country from accessing loans.
According to him, the bank's SME Directorate handles applications for mainly long and medium term loans between N5 million and N500 million while the Large Enterprises Directorate processes those above N500 million. "Requests below N5 million are processed under Bol's Bottom of the Pyramid (BoP) scheme under which we lend to micro enterprises through appointed microfinance banks, known to have specialised skills for handling highly labour intensive micro enterprises, at single digit interest rate. We also lend directly to some micro enterprises at various concessional interest rates under some special funds that Bol manages on behalf of its development partners that include state governments, some federal ministries as well as agencies and the Dangote Foundation," he said.
Olagunju explained that the N10 billion (ten billion naira) MSME Fund, which the bank jointly floated with the Dangote Foundation attracts an interest rate of 5 per cent. This was arrived at because Dangote's fund is at zero per cent while that of Bol is at 10 per cent.
Olagunju said that the rejection rate of loan applications that emanate from SMEs is in excess of 90 per cent. "We receive poorly prepared applications that do not contain the information required to carry out proper appraisals. To address this problem, 122 Business Development Service Providers (BDSPs) were appointed through a competitive process in November 2014. At this rate, we are looking forward to supporting at least 1,220 beneficiaries through our BDSPs annually which amounts to more than 25 percent of what was achieved in 13 years when we assisted 4,126 beneficiaries," he said.
The Bol boss hopes that the operations of the 1,220 potential beneficiaries would lead to the creation of several thousands of direct and indirect jobs especially among the suppliers of their input and distributors of their products including importation and exportation.
Olagunju said the major difference between the rich and the poor nations of the world is their level of industrialization, noting that industrialization is a multidisciplinary process where everybody has a role to play to achieve set objective. "We do not need rocket science to transform our economy; other oil producing countries have diversified their economies. There is need to increase the contribution of the manufacturing sector to our Gross Domestic Product (GDP) to double digits," he said.
According to him, the only way Nigeria can achieve inclusive growth is to embark on commodity- based industrialization strategy.
According to him, the bank's SME Directorate handles applications for mainly long and medium term loans between N5 million and N500 million while the Large Enterprises Directorate processes those above N500 million. "Requests below N5 million are processed under Bol's Bottom of the Pyramid (BoP) scheme under which we lend to micro enterprises through appointed microfinance banks, known to have specialised skills for handling highly labour intensive micro enterprises, at single digit interest rate. We also lend directly to some micro enterprises at various concessional interest rates under some special funds that Bol manages on behalf of its development partners that include state governments, some federal ministries as well as agencies and the Dangote Foundation," he said.
Olagunju explained that the N10 billion (ten billion naira) MSME Fund, which the bank jointly floated with the Dangote Foundation attracts an interest rate of 5 per cent. This was arrived at because Dangote's fund is at zero per cent while that of Bol is at 10 per cent.
Olagunju said that the rejection rate of loan applications that emanate from SMEs is in excess of 90 per cent. "We receive poorly prepared applications that do not contain the information required to carry out proper appraisals. To address this problem, 122 Business Development Service Providers (BDSPs) were appointed through a competitive process in November 2014. At this rate, we are looking forward to supporting at least 1,220 beneficiaries through our BDSPs annually which amounts to more than 25 percent of what was achieved in 13 years when we assisted 4,126 beneficiaries," he said.
The Bol boss hopes that the operations of the 1,220 potential beneficiaries would lead to the creation of several thousands of direct and indirect jobs especially among the suppliers of their input and distributors of their products including importation and exportation.
Olagunju said the major difference between the rich and the poor nations of the world is their level of industrialization, noting that industrialization is a multidisciplinary process where everybody has a role to play to achieve set objective. "We do not need rocket science to transform our economy; other oil producing countries have diversified their economies. There is need to increase the contribution of the manufacturing sector to our Gross Domestic Product (GDP) to double digits," he said.
According to him, the only way Nigeria can achieve inclusive growth is to embark on commodity- based industrialization strategy.
