The Bank of Industry

Bank of Industry Limited
Government Owned Corporation
Industry Financial Services
Predecessor Investment Company of Nigeria (ICON) Limited
Nigerian Bank for Commerce and Industry (NBCI)
Nigerian Industrial Development Bank (NIDB) Limited
Founded 1959
Headquarters 23 Marina Street
P.M.B 12855
Lagos Island, Lagos
Lagos State
Nigeria
Key people
 Olukayode Pitan, (Managing Director)
Aliyu Abdulrahman Dikko, (Chairman)
Products Term Loans
Working Capital Loans
Insurance Products
Trustee Services
Leasing Services
Savings
Decrease ₦14.57 billion (2016)[1]
Total assets Increase ₦682.97 billion (2016)[1]
Number of employees
 335 (2016)[1]
Subsidiaries BOI Investment Trust Company (BOI-ITC)
BOI-Microfinance Bank Limited (BOI-MFB)
BOI Insurance Brokers (BOI-IB) Limited
LECON Financial Services
Rating National Long Term Rating
Moody's: Aa3(11/2017)[2]
Fitch: AA+ (2017)[3]
Agusto & Co.: Aa (2017)[4]
Website Bank of Industry

Bank of Industry Limited (abbreviated as 'BOI') is the oldest and largest Development Finance Institution (DFI) currently operating in Nigeria. It is owned by the Ministry of Finance Incorporated (MOFI) Nigeria (94.80%), the Central Bank of Nigeria (CBN) (5.19%) and private shareholders (0.01%). The bank has 11 members on its board and it is chaired by Aliyu Abdulrahman Dikko.

The bank is a parastatal under the Federal Ministry of Industry, Trade and Investment tasked with providing financial assistance for the establishment of large, medium and small projects as well as the expansion, diversification and modernisation of existing enterprises; and rehabilitation of existing ones. In line with the Nigeria Industrial Revolution Plan and Economic Recovery and Growth Plan (ERGP) released by the Government of Nigeria, the bank focuses on financing industrial projects in key sectors of the economy such as: Agro and Food Processing, Light Manufacturing, Gas and Petrochemicals, Engineering and Technology, Solid Minerals and Creative Industries (arts and entertainment). BOI also focuses on promoting youth entrepreneurship, women-owned businesses and renewable energy projects.

History

Bank of Industry Limited began operations in 1959 as the Investment Corporation of Nigeria (ICON) Limited. In 1964, ICON Limited was reconstituted to become the Nigerian Industrial Development Bank (NIDB) Limited under the guidance of the World Bank. Initially, International Finance Corporation (IFC) held 75% equity in NIDB and produced the first Managing Director. However, the equity structure was diluted in 1976 as a result of the indigenization decree.[5]

In 2001, the BOI was reconstructed out of the merger of the Nigerian Industrial Development Bank (NIDB), Nigerian Bank for Commerce and Industry (NBCI) and the National Economic Reconstruction Fund (NERFUND). Although the bank's share capital was initially set at ₦50 billion in the wake of NIDB's reconstruction, it was increased to ₦250 billion in 2007.[6] The purpose was to better position BOI in addressing Nigeria's rising economic profile in line with its mandate to provide financial assistance for the establishments of new enterprises, the expansion, diversification and modernisation of existing enterprises, and the rehabilitation of ailing industries.

Over the years, the bank has undergone several transformations and re-engineered its processes to improve service delivery. In 2014, the bank commenced the use of Business Development Service Providers (BDSPs) in order to improve the quality of entrepreneurs and loan applications. The BDSPs are expected to assist MSMEs with structuring their business plans and business models and provide relevant capacity building and training programmes.[7] The bank is also collaborating with the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) and Department for International Development (DFID) to create an institute to accredit BDSPs in Nigeria.

In 2015, the Bank of Industry, alongside The Tony Elumelu Foundation, was awarded the Creative Entrepreneurs Association of Nigeria (CEAN) Creative Industry Award for the 'Highest Support for the Nigerian Creative Industry'.[8]

The bank has played an active role in advocating for stable and reliable energy solutions in Nigeria. In 2011 the bank partnered with the United Nations Development Programme (UNDP). This partnership then led to the development of the BOI-UNDP Solar Energy Programme (SEP), an intervention programme that promotes and supports the expansion of renewable energy services in off-grid rural communities. For its role in the deployment of electrification projects, the bank was presented with the 'Outstanding Sustainable Project Financing' award at the 2017 Karlsruhe Sustainable Finance Awards in Karlsruhe, Germany.[9]

In 2017, the bank was awarded the ISO 9001:2015 Quality Management System (QMS) certification by DQS Holding GmbH after successfully completing the ISO 9001:2015 QMS certification programme.[10]

Operations

The bank has been rated among the highest financial institutions in Nigeria with long term national ratings by Moody's (Aa3)[2], Fitch (AA+)[3] and Agusto & Co. (Aa)[4].

In driving economic growth, BOI has continuously focused on improving the access to finance available to SMEs. As such, the bank has several products to support MSME clusters. Some of these include:

  • NollyFund - geared towards the development of the local film industry;
  • Fashion and Beauty Product - set up to support enterprises engaged in Adire (Tie & Dye) and Aso-Oke, clothing design and production, fashion/beauty training institutes, leatherworks (shoes, bags, belts), beauty salons and more;
  • Arts and Craft Product - introduced to support enterprises involved in pottery, brass works, wood designs, fibre crafts, painting etc.

BOI also serves as a key vehicle in managing and disbursing funds meant for intervention in certain sectors. In the past, the bank managed the ₦10 billion Rice Intervention Fund, ₦18 billion National Automotive Council (NAC) Fund, ₦9.6 billion Cement Fund, ₦4.3 billion Cassava Bread Fund and ₦18 billion Rice and Cassava Fund.

The bank has been instrumental in administering the ₦300 billion Power and Aviation Intervention Fund and ₦50 billion Cotton, Textile and Garments Intervention Fund from the CBN, $200 million Nigerian Content Intervention fund (NCI Fund), ₦2.5 billion Nigerian Artisanal and Small-Scale Miners (ASM) Finance Support Fund amongst other funds. BOI also manages and disburses the Government Enterprise and Empowerment Program (GEEP), one of a number of social intervention programmes introduced by the Federal Government of Nigeria. GEEP (also known as MarketMoni) is a ₦140 billion fund aimed at supporting individuals in the informal sector with loans at zero percent interest rate. Through the fund, BOI supports trade cooperatives, women cooperatives, micro-enterprises and trade associations with loans ranging from ₦10,000 to ₦50,000.[11]

As part of efforts to expand financing opportunities, BOI began partnerships with several state governments under a matching fund scheme. The MSME matching fund is a 50:50 counterpart funding scheme with State Governments to administer the fund for the establishment of micro, small or medium scale businesses in participating states.[12]

Strategic Partnerships

Collaboration with Nigeria Content Development Management Board

In August 2017, Nigeria Content Development and Monitoring Board (NCDMB) launched a $200 million Nigerian Content Intervention Fund (NCI Fund) to be used for developing capacity in the oil and gas industry. The fund was set up to finance projects, programmes and activities which directly increase Nigerian content in the oil and gas industry. The pool of funds will be managed by the BOI to meet the funding needs of indigenous manufacturers, service providers and other key players in the Nigerian Oil and gas Industry. The funds will be deployed towards providing support to indigenous players in the Nigerian Oil and Gas Industry to procure fixed assets, refinance existing loans, fund working capital and finance contracts.[13]

Collaboration with Federal Ministry of Mines and Steel Development

In 2017, the Federal Ministry of Mines and Steel Development (FMMSD) set up a ₦2.5 billion Nigerian Artisanal and Small-Scale Miners (ASM) Finance Support Fund and designated BOI as the sole fund manager. The purpose of the ASM Fund is to address the funding requirements of artisanal and small-scale miners while promoting the development of solid minerals potentials of Nigeria. Through the scheme, artisanal miners can access up to ₦10 million while small-scale miners can access up to ₦100 million.[14]

BOI-UNDP Solar Energy Programme

In 2011, BOI and United Nations Development Programme (UNDP) launched the Access to Renewable Energy Project. The project was set up to serve as an advocacy and awareness programme to promote and support the expansion of renewable energy services to support households and local enterprises in unserved and underserved communities. To achieve this, BOI and UNDP encouraged stakeholders in the renewable energy space to invest in the Nigerian sector. However, in 2015, the project was refocused to align with BOI's strategy to fund and implement renewable energy projects in collaboration with relevant stakeholders. As a result, the project was renamed to the Solar Energy Programme (SEP) to reflect the change in strategic direction.

The SEP commenced with a Rural Electrification Project which involved the provision of long term financing for the installation of low cost micro-grid and stand-alone solar energy solutions in nominated off-grid rural communities. Between 2015 and 2016, micro-grid and stand-alone solar energy solutions were installed in 6 off-grid rural communities in 6 Nigerian States: Niger State, Osun State, Gombe State, Anambra State, Edo State and Kaduna State.[15] Pre-paid metres, using Pay-As-You-Go models, were installed in each household and microenterprise to accommodate for flexibility of payment and to solve challenges of unpaid bills. The pilot phase was considered a success and also attracted several potential investors across Nigeria.

On the back of this success, BOI and UNDP entered into a cost-sharing agreement to fund the second phase of the project. In 2016, BOI provided $1.4 million debt financing while UNDP provided $600,000 grant to replicate the solar energy solutions in 11 additional off-grid communities across 4 Nigerian States: Niger State, Gombe State, Anambra State and Kaduna State.

In view of the benefits of the SEP, BOI introduced a ₦2 billion Solar Energy commercial product in 2017 to be accessed by various categories of end users both directly through BOI and indirectly.[16]

Through the Solar Energy Programme, the bank aims to power more than 100,000 off-grid households and microenterprises in rural and commercial communities by 2021.[17]

Collaboration with African Development Bank (AfDB) Group

In 2011, the Board of Directors of African Development Bank (AfDB) Group approved $500 million multi-tranche line of credit to assist BOI in financing local SMEs Nigeria. In 2015 and 2017, the bank received $100 million (in two tranches of $50 million each) to fund export-oriented SMEs with the capacity to generate foreign exchange.[18][19] The line of credit would be provided for funding projects aimed at systematic poverty reduction, employment generation and wealth creation through entrepreneurial, social and economic development.[20] As part of the agreement, AfDB required the bank provide technical assistance for capacity building for both BOI and SMEs. To this end, BOI enlisted international companies BDO/GBRW.[21]

Collaboration with Dangote Foundation

In 2011, Bank of Industry and Dangote Foundation entered into a partnership agreement to develop a ₦5 billion fund, with BOI and the Dangote Foundation committing ₦2.5 billion each. The fund will be available to enterprises focused on Agro-processing, Manufacturing and the trading of Made-in-Nigeria goods.[22]

Bottom of Pyramid (BOP) Scheme

Bank of Industry introduced the Bottom of Pyramid Scheme at the beginning of 2017 to provide credit delivery to under-served and under-banked micro-entrepreneurs in the society. The on-lending initiative leverages on the spread and penetration of microfinance banks as channels to stimulate activity among micro-entrepreneurs.[23] The bank proposed ₦5 billion under the first phase of the scheme and has disbursed over ₦3 billion through participating MicroFinance banks.[24] The scheme aligns with the Nigerian government's employment and wealth creation objectives of the National Enterprise Development Programme (NEDEP) and focuses on industries such as agriculture, manufacturing, food products, beverages, solid minerals, services and artisanal activities.[25]

Youth Empowerment Initiatives

Graduate Entrepreneurship Fund (GEF)

The Graduate Entrepreneurship Fund is a ₦2 billion fund set up in 2015 by BOI in collaboration with the National Youth Service Corps (NYSC). The purpose of GEF is to provide funding and capacity building to serving members of the NYSC. At the time of introduction, the interest rate on loans was 9%. However, in 2017, the interest rate was revised to 0% to ensure sustainability of youth businesses and to encourage more youth entrepreneurs under the NYSC scheme.[26]

The GEF scheme is available to serving NYSC members that have successfully passed the Bank's screening process, attended the capacity building programme developed specifically for the prospects under GEF and submitted a bankable business plan. Applicants are able to access loans up to ₦2 million.[27]

Youth Entrepreneurship Support Programme (YES-P)

The programme was developed in 2016 to provide funding to aspiring entrepreneurs aged 18 - 35 years with a minimum educational qualification of Ordinary National Diploma. Individuals may access up to ₦5 million out of the ₦10 billion fund. Similar to the Graduate Entrepreneur Fund (GEF), the programme also offers capacity building in entrepreneurship, business management and technical skills. The bank has developed partnerships with Pan Atlantic University Enterprise Development Centre (PAU-EDC), Kaduna Business School (KBS), Leap Africa, Prinsult Co. Ltd, ValueCon Business Services, VSL Consult Ltd, Empretec Nigeria Foundation, Fate Foundation and AfterSchool Graduate Development Centre (AGDC) to facilitate the Entrepreneurship Capacity Building programme.[28]

Youth Ignite Programme

The Youth Ignite Programme was introduced in 2017, in partnership with Afterschool Graduate Development Centre (AGDC), to cater to youth-led businesses at the micro level. The programme is designed to provide capacity building and funding up to ₦200,000 to micro enterprises. BOI plans to support 1 million micro entrepreneurs create 5 million jobs by 2022.[29]

Branches

The Bank of Industry has a strong branch network across Nigeria with 24 branches, a headquarters in Lagos State, Nigeria and a corporate office in Abuja, Nigeria.

Subsidiaries

BOI-Investment Trust Company (BOI-ITC)

BOI Investment and Trust Company Limited (BOI-ITC) was established in 1978 as a wholly owned subsidiary of BOI's predecessor, Nigerian Industrial Development Bank (NIDB). It was set up as a capital market operator to function as trustee, registrar and fund/portfolio manager. The company is also registered with the CBN as a finance company. As a Trustees, BOI-ITC is engaged in the specialised business of trust services including private and public trust, employment retirement benefits, trust fund management for both private and corporate bodies, estate administration under trust, executorships among other related services.

BOI-ITC also provides secretarial, financial advisory, consultancy and other ancillary services to companies. In particular, it serves as one of BOI's major business development support providers which functions to assist MSMEs and large enterprises with preparing loan applications. To this end, BOI-ITC acts in the following capacity:

  • Reviewing the major elements of the company's financial plans to determine the appropriate level of financing required.
  • Packaging the loan request for a group of commercial banks (both onshore and offshore), as well as conducting feasibility studies where applicable.
  • Monitoring the application process to ensure prompt response.
  • Assisting in creating value through a post-loan approval advisory service until the final liquidation of the loan facility.

BOI-Microfinance Bank Limited (BOI-MFB)

The BOI-Microfinance Bank Limited is a limited liability company duly incorporated in Nigeria under the 2002 Companies and Allied Matters Act and regulated by CBN. The bank offers a broad range of financial services to micro, small and medium-sized enterprises and various low-income earners both as individuals and as groups. Its focus is to ensure micro entrepreneurs in the real sector in Nigeria have access to credit facilities at affordable rates. It offers asset financing loans, working capital loans, consumer loans and group loan which do not exceed ₦500,000 per enterprise.[30] In addition, BOI-MFB aims to encourage savings among the unbanked productive poor of the Nigerian society.

BOI-MFB is a major vehicle in delivering on the objectives of the BOI Bottom of the Pyramid Scheme (BOP).

BOI Insurance Brokers (BOI-IB) Limited

BOI Industrial and Development Insurance Brokers (BOI-IB) Limited offers insurance and consultancy services. BOI-IB Limited provides organisations with fire/extraneous perils insurance, burglary/housebreaking insurance, consequential loss, machinery breakdown, money insurance, goods in transit, group personal accident, public liability, fidelity guarantee, marine insurance and automobile (motor) insurance.[31]

BOI-IB limited also provides insurance cover for BOI loans and services.

LECON Financial Services

LECON Financial Services, formerly Leasing Company of Nigeria Limited, was established as a wholly owned subsidiary of Bank of Industry Limited (BOI), formerly Nigerian Industrial Development Bank Limited, (NIDB) in 1989. It was set up to augment the activities of BOI by providing ancillary facilities to loan beneficiaries of the bank. Nigerian Maritime Administration & Safety Agency (NIMASA) came in as shareholder in order for LECON to participate in the ship building and ship acquisition fund. LECON Financial Services provides leasing solution such as equipment leasing, lease syndication and trade finance. Since inception, it has provided leasing solutions to over 230 BOI projects valued at more than ₦4.5 billion. The portfolio covers areas of manufacturing (textiles, plastics), agriculture and services (farm implements, hotel and office equipment), marine (trawling, dredging), telecommunications (cable satellite) and transportation and Haulage (mass transit, buses and road haulage trucks for dry and wet cargo).[32]

References

  1. 1 2 3 Bank of Industry Annual Report & Accounts 2016
  2. 1 2
  3. 1 2
  4. 1 2
  5. ↑ worldbank.org:
  6. ↑ boi.ng:
  7. ↑ boi.ng:
  8. ↑ creative-nigeria.org: Tony Elumelu, Bank of Industry, Ayo Makun and Many More Win Creative Industry Awards 2015
  9. ↑ businessamlive.com: Nigeria's Bank of Industry bags Karlsruhe sustainable devt award
  10. ↑ boi.ng:
  11. ↑ marketmoni.com.ng:
  12. ↑ boi.ng:
  13. ↑ ncdmb.gov.ng: NCDMB releases N61.18bn local content fund to BoI
  14. ↑ minesandsteel.gov.ng: MMSD, BoI Call for application for ASM Support Fund
  15. ↑ guardian.ng: BoI expands renewable energy funding with N1b solar fund
  16. ↑ thecable.ng: BOI unveils N1bn solar energy fund to 'light up Nigeria'
  17. ↑ thisdaylive.com: BoI, UNDP Sign $2m Agreement on Solar Energy for Off-grid Communities
  18. ↑ sunnewsonline.com: Special Report on Bank of Industry (BoI): BOI: Driving the Engine of Nigeria's Industrial Growth
  19. ↑ boi.ng: BOI Secures AfDB $100 million Facility to Support SMEs
  20. ↑ afdb.org: AfDB Approves a Financial Package of USD 500 Million for the Bank of Industry (Nigeria)
  21. ↑ boi.ng:
  22. ↑ boi.ng:
  23. ↑ thecable.ng: BOI partners LAPO, 13 Microfinance Banks in Delivering Secretarial, financial advisory and consultancy, and other ancillary services to companies ₦3.1bn to Entrepreneurs
  24. ↑ guardian.ng: BoI targets bottom of pyramid with N3.1b to microfinance banks
  25. ↑ punchng.com: 14 microfinance banks get BoI's N3.1bn funds
  26. ↑ boi.ng:
  27. ↑ guardian.ng: BoI reduces interest rate to zero percent for youths
  28. ↑ boi.ng:
  29. ↑ youthignite.ng:
  30. ↑ boi.ng:
  31. ↑ boi.ng:
  32. ↑ http://boilecon.com/about-us/
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