Post by Trade facilitator on Sept 15, 2021 17:30:12 GMT 1
Bank Of Industry (BOI): Things You Must Know About The Bank’s Loans – Part 1
The Nigerian Bank of Industry (BOI), which is also known as Bank of Industry Limited, is the oldest and largest Development Finance Institution currently operating in Nigeria as at 2021.
According to Wikipedia, The Bank is owned jointly by the Ministry of Finance Incorporated Nigeria, The Central Bank of Nigeria and some private shareholders.
It was founded in October 2001. The Managing Director is Olukayode Pitan, while the Chairman is Aliyu Abdulrahman with eleven members on the board.
One basic thing you need to know about the Bank of Industry is that it targets the Industrial Sector of Nigerian economy.
Different other banks target different sectors of the economy according to the mandate that set them up; Bank of Industry (BOI) in Nigeria is setup primarily to cater for the industrial sector.
Having this at the back of your mind, you need to know some things about how to access the Bank’s loans as SME.
The Bank of Industry is set up to encourage and grow a vibrant industrial production and value creation by manufacturing and processing activities of businesses in Nigeria.
The main idea is to provide the industrial sector with the required finance and business support services that they will need to succeed in their ventures.
The Bank targets the following sub-sectors:
Agricultural and Agro-allied businesses
Solid minerals
Oil and Gas
Manufacturing
Any other business that operates in any of the above value chains and uses EQUIPMENT to carry out processes that add value.
Please note that the Bank of Industry does not finance the following:
Raw materials
Working capital
Lands and buildings
The bank is setup primarily to finance industrial equipment; therefore if you are in the agricultural sector, and you are a primary agricultural producer, like a farmer; the Bank of Industry can help you finance the following equipment:
Tractors
Combine harvesters
Dryers
Freezers
Or any other type of equipment you need to be successful in producing your goods.
How Does The Bank Of Industry Disburse The Funds To The Industrialists?
Please note carefully, the bank does not disburse the loan to the borrower directly, but rather to the seller of the equipment that the loan is intended to be used to finance.
Look at it this way, the Bank of Industry will not give the loan amount to you directly; rather the money will be given to the company that will be selling to you the equipment you want to buy after passing through some procedures.
Before paying the vendor, the Bank will go through the following procedures:
The Bank will carry out all necessary and reasonable due diligence to be sure that the quotation from the vendor is genuine
It will ensure that the price quoted for the equipment is reasonable for the type of equipment you want to buy
The Bank will want to take all reasonable steps to make sure that the equipment you want to buy is value for money. Not that you will go and connive with a fraudulent vendor to supply you with fake machines
The Bank will encourage you to see if you can source the equipment from local manufacturers like Federal Institute of Industrial Research Oshodi (FIIRO) before going through importation. As this will guarantee availability of spare parts and prompt servicing when the need will arise.
It is important for you to understand that the Bank of Industry (BOI) does not re-finance plant and equipment. What does this mean? It means that if you had bought some equipment previously with a loan, maybe the loan is too expensive; and now you want to re-finance it at a lower cost through the Bank of Industry, no, the Bank of Industry (BOI) cannot help you even if the loan was used to finance plant and equipment.
In our subsequent articles in this series we are will continue to look at things you need to know about accessing loans from Bank of Industry (BOI) and other Financial Institutions.
The Nigerian Bank of Industry (BOI), which is also known as Bank of Industry Limited, is the oldest and largest Development Finance Institution currently operating in Nigeria as at 2021.
According to Wikipedia, The Bank is owned jointly by the Ministry of Finance Incorporated Nigeria, The Central Bank of Nigeria and some private shareholders.
It was founded in October 2001. The Managing Director is Olukayode Pitan, while the Chairman is Aliyu Abdulrahman with eleven members on the board.
One basic thing you need to know about the Bank of Industry is that it targets the Industrial Sector of Nigerian economy.
Different other banks target different sectors of the economy according to the mandate that set them up; Bank of Industry (BOI) in Nigeria is setup primarily to cater for the industrial sector.
Having this at the back of your mind, you need to know some things about how to access the Bank’s loans as SME.
The Bank of Industry is set up to encourage and grow a vibrant industrial production and value creation by manufacturing and processing activities of businesses in Nigeria.
The main idea is to provide the industrial sector with the required finance and business support services that they will need to succeed in their ventures.
The Bank targets the following sub-sectors:
Agricultural and Agro-allied businesses
Solid minerals
Oil and Gas
Manufacturing
Any other business that operates in any of the above value chains and uses EQUIPMENT to carry out processes that add value.
Please note that the Bank of Industry does not finance the following:
Raw materials
Working capital
Lands and buildings
The bank is setup primarily to finance industrial equipment; therefore if you are in the agricultural sector, and you are a primary agricultural producer, like a farmer; the Bank of Industry can help you finance the following equipment:
Tractors
Combine harvesters
Dryers
Freezers
Or any other type of equipment you need to be successful in producing your goods.
How Does The Bank Of Industry Disburse The Funds To The Industrialists?
Please note carefully, the bank does not disburse the loan to the borrower directly, but rather to the seller of the equipment that the loan is intended to be used to finance.
Look at it this way, the Bank of Industry will not give the loan amount to you directly; rather the money will be given to the company that will be selling to you the equipment you want to buy after passing through some procedures.
Before paying the vendor, the Bank will go through the following procedures:
The Bank will carry out all necessary and reasonable due diligence to be sure that the quotation from the vendor is genuine
It will ensure that the price quoted for the equipment is reasonable for the type of equipment you want to buy
The Bank will want to take all reasonable steps to make sure that the equipment you want to buy is value for money. Not that you will go and connive with a fraudulent vendor to supply you with fake machines
The Bank will encourage you to see if you can source the equipment from local manufacturers like Federal Institute of Industrial Research Oshodi (FIIRO) before going through importation. As this will guarantee availability of spare parts and prompt servicing when the need will arise.
It is important for you to understand that the Bank of Industry (BOI) does not re-finance plant and equipment. What does this mean? It means that if you had bought some equipment previously with a loan, maybe the loan is too expensive; and now you want to re-finance it at a lower cost through the Bank of Industry, no, the Bank of Industry (BOI) cannot help you even if the loan was used to finance plant and equipment.
In our subsequent articles in this series we are will continue to look at things you need to know about accessing loans from Bank of Industry (BOI) and other Financial Institutions.
