The Bank of Industry Limited (BOI) is one of Nigeria’s major development financing institution and has been a flag bearer in the provision of long-term financial support to various industries of the country’s economy.
BOI has the mandate of 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 ones.
The Bank Of Industry targets businesses that engage in manufacturing and processing activities. Its target sub-sectors include Agro-processing, Solid Minerals, Information Technology, Oil and Gas and Creative Industry.
Incorporated in 1964 as the Nigerian Industrial Development Bank (NIDB) Limited, BOI is the oldest and largest financial institution in the country. In 2001, the NIDB was restructured into the present-day BOI.
The NIDB overhaul in 2001 was a deliberate action by the federal government to place the bank in a better position to discharge its duties in a more efficient, profitable, and focused manner and this was achieved through the recapitalization of BOI to a tune of 250 billion Naira within the year. It has its headquarter in Lagos and offices in each geo-political zone of the country and the FCT.
In 2016, the bank formally launched a 10 billion Naira Youths Entrepreneurship Support (YES) project to empower youths with loans to start businesses. Through the BOI’s YES program, about 36,000 jobs are expected to be created annually.
Who is Eligible for Bank of Industry Loans?
The following are categories of people/businesses eligible to access loans from the BOI;
1. Small, medium, and large-scale businesses, excluding cottage industries.
2. New or existing companies, seeking expansion, modernization, or diversification.
3. Credit-worthy promoters who will be required to prove their commitment to the project by contributing at least 25% of the project cost excluding land.
4. Borrowers whose management capability, financial situation (including the availability of collateral and guarantee), character and reputation are incontrovertible.
5. Clients with demonstrable ability to meet loan repayments.
6. Borrowers with no record of unpaid loans to erstwhile development finance institutions and other banks.
Project Selection Criteria
BOI’s operational framework emphasizes on prudent management and project selection, which is targeted at job creation and poverty alleviation in the country and supports quality projects with potential developmental impact. The Bank considers industries that meet the following criteria:
- Capacity to substantially add to industrial output.
- Projects that use largely domestic raw materials.
- Industry in which Nigeria’s comparative advantages could be converted to competitive ones.
- Ability to promote the expansion of exports through the production of high-quality products that are attractive to domestic and export markets.
- Niche projects that are produced for worldwide consumption. Projects that create both forward and backward linkages, with the rest of the domestic or regional economy.
- Ventures that promote inter-state or regional integration.
- Small and medium enterprises (SMEs) that have linkage with large firms belong to clusters and operate under franchise.
- Businesses with high employment generation capacity.
- The project must be technically feasible, commercially viable and economically desirable.
- Projects that are environmentally friendly.
- Businesses that have good management set-up and proper accounting procedures.
- Businesses promoted by women entrepreneurs.
The following industrial subsectors are also accorded priority in the project selection:
- Textile and leather Polymer based industries
- Solid minerals
- Information communication technology (ICT) services
Criteria/Requirements for BOI Business Loans and Grants
Businesses intending to access loans from the bank need to meet the following criteria.
- Collateral worth at least 150 percent of your intended loan facility.
- A formal letter of Application
- Photocopy of Certificate of Registration or Incorporation
- Certified True Copies of Forms C02 and C07
- A photocopy of the Certified True Copy of Memorandum and Articles of Association of the Company.
- Feasibility Study Report (4 copies)
- Quotations for items of equipment (at least 2 or 3 quotations from different sources), where applicable.
- Three (3) years most recent Audited Accounts of the company (for existing company).
- Organizational Structure and Management of the company.
- Three (3) years most recent Tax Clearance Certificate for the Company and two (2) Directors.
- Eight recent Passport photographs of each of the two Directors and the Company Secretary.
- A completed copy of the Bank of Industry Questionnaire.
- Declaration of total outstanding liabilities of the company.
- Statement of Account for the past six months from the company’s bankers
- Acceptable Securities shall include a charge/security interest over all of the applicant’s assets, copyrights, rights, etc., and on the equipment/ assets financed and/or the under-listed securities among others.
- Registered Intellectual Property/Proprietary Assets. Assignments of all agreements and Intellectual Property Rights (IPRs) to BOI. The Bank would have right in the negotiation of valuation of IPRs.
- Joint and Several Guarantees of the Directors of Applicant Company with Notarized Statement of Net Worth.
- Provision of Guarantee cover issued by any financial institution acceptable to the bank.
- Insurance cover from any acceptable/reputable insurance company for short-term lending of not more than one year.
- Marketable financial instruments.
- Assignment of receivables/lien on proceeds/deposits and the right of set-off.
- First hypothecation charge on all the tangible moveable assets under the project.
- Ordinary producers would be required to bring in at least 25 percent of the project cost as promoters’ contribution.
- Producers would be required to tie up the advances from the Distributors to cover 35 percent to 40 percent of the budget.
- A Trust and Retention Account (TRA) may be maintained for all capital as well as revenue inflows and outflows. Thus receivables on the sale of all IPRs would be credited to TRA. The modalities of TRA would be worked out on a case-by-case basis to the satisfaction of the Bank, which will have the first charge on the TRA.
How To Apply For BOI Business Loans
- Visit the BOI website or any of the bank branches located in the geopolitical zone nearest to you.
- Collect the Bank’s forms
- Complete the BOI Questionnaire
- Submit the forms
- Download copy(ies) of the completed forms.
The Bank of Industry whose reputation is built upon a foundation of integrity wouldn’t tolerate any form of fraud, corruption or other malpractice and is committed to working in an honest and transparent way.
It is important to note that the BOI is not just a bank concerned with providing you with finance, but are very much interested in the success of your business.