By Tajudeen Abdulkareem
The pangs of national economic downturn has forced state governors to look beyond the narrow confines of federal allocation and internally generated revenue. Many are now wise enough to tap all available opportunities, including windows of investment in agriculture, solid minerals and human capital development.
Although many governors previously displayed a lukewarm attitude to providing marching funds for soft loans and foreign grants, the aggressive advocacy drive of the Bank of Industry, BoI, has started to yield positive results, especially in the promotion of small and medium scale business.
The BoI management, led by Mr. Waheed Olagunju, has demonstrated an uncommon passion and commitment, traversing all nooks and corners of the country in a bid to woo state governments on the benefits of promoting small and medium scale business; and also assisting artisans and semi-skilled Nigerians to improve their capacity for greater efficiency.
As the oldest and most successful development finance institution in the country, the bank has been consistent in providing long-term financial support to various sectors of the Nigeria’s economy. BoI was incorporated in 1959 as ICON Limited, restructured into the Nigerian Industrial Development Bank in 1964 and renamed BoI in 2001.
In recent times, it has rapidly expanded its risk assets without compromising quality such that the ratio of its non-performing loans is currently 3.8 per cent which is one of the lowest in Nigeria’s banking industry. Indeed its commodity-based industrialization strategy emphasizes adding value to Nigeria’s vast agricultural, solid minerals and petroleum resources.
Records indicate that thousands of micro, small, medium and large enterprises across the country have received some life line from the bank. This gesture has had far-reaching multiplier effects on the economy such as job creation and resultant wealth creation, as well as poverty alleviation. Because many of the assisted projects are also import substitution and export-based, BoI’s esteemed customers have contributed significantly to efforts at attaining national self-reliance through backward integration and economic diversification, all of which positively impact the contribution of the manufacturing sector to Nigeria’s Gross National Product.
In June last year, Fitch Ratings London, gave the bank an AA+ rating. In January, this year, Moody’s Investors Services gave the bank a first-time rating of ba3 positive rating with a stable outlook, while positive ratings are also being expected from other international rating agencies.
The bank has a remarkable profile in promoting entrepreneurship among the young people. Worthy of mention is the N10 billion Youth Entrepreneurship Support Programme designed to address youth unemployment in Nigeria. The scheme has earned the bank considerable accolades, home and abroad. Within six weeks of the online business ideas completion, almost 40,000 entries were received, which is unprecedented. No fewer than 10,000 beneficiaries are expected to emerge within the first year of the Programme. The successful participants will not be job seekers as they would also become employers of labour with each of them creating at least 4-5 jobs. Going forward, BoI has identified 40 micro, small and medium enterprises clusters which qualify for single-digit interest rate funds under simplified security arrangements which allows the bank to lend up to N10 million to credible ventures.The scheme is projected to create about 36,000 direct and indirect jobs annually.
Recently, BoI disbursed N48.44million to 15 out of 25 budding entrepreneurs of the Kaduna Startup Entrepreneurship Programme whose business proposals met the banks Risk Acceptance Criteria. The scheme is the brainchild of the Kaduna State government in conjunction with the Kaduna Business School and the Development Finance Institution, to empower aspiring entrepreneurs who wish to access various intervention funds in support of SMEs. The bank has promised to devise strategies to increase the success rate of beneficiaries in minimizing the chances of failure.
The Sokoto State government has also sealed an agreement with the bank to establish a N2billion Industrial development fund to boost micro, small and medium scale enterprises in the state. For an appreciative Governor Aminu Waziri Tambuwal the focus on SMEs was important because they are critical in implementing the industrialization policy of his administration.
At the last count, 19 states have embraced the partnership co-operation offered by the bank in a determined effort to encourage entrepreneurship, local self-reliance and poverty alleviation across the country. It is instructive that interests on loans disbursed by BoI are far more business-friendly unlike what obtain in commercial banks.
In line with its cluster specific approach, BoI also launched the N2billion fashion fund for female SME operators in the fashion industry. The fund is the third in the series of special SME cluster-focused products that the bank introduced, after the launch of the Cottage Agro processing fund in 2014, and the launch of the BoI Nolly Fund. The bank’s foray into the fashion industry through this fund is to exploit the enormous opportunities the industry, create jobs and generally grow the stature of the Nigerian fashion sector within the global fashion industry.
To enable it get closer to its customers and improve service delivery, the bank established a Customer Service Department, to refocus its operations as more consumer-centric in keeping up with best global practice. It also increased its branch network by establishing seven new state offices in a year, increasing them to 17. The bank also upgraded its banking application from Equinox to a more robust version, the Rubikon banking platform; integrated its system with NIBSS for seamless customer payments and collections, and launched an online loan application portal and a mobile App, among other digital products.
At this year’s Lagos Chamber of Commerce and Industry Awards, BoI won the award For Industry Support through Intervention Funds. The bank recently received recognition for its dynamism in overhauling its system with the ISO 9001:2008 Quality Management Systems compliant certificate.
Indeed, BoI has been at the front row among agencies promoting national self-reliance through economic diversification For decades, Nigeria’s economy has been import dependent, literally swimming in petro-dollars. In a bid to promote self-reliance and production of locally made products, the bank staked N.6.6 billion on the ultra-modern steel complex of Kam Industries Limited, Ilorin, Kwara State, under the Central Bank of Nigeria’s Intervention Fund. This one project destined to boost commercial activities and socio-economic development of Kwara State even as it creates no fewer than 750 jobs. As emphasized by Mr. Olagunju, for Nigeria to domesticate the production capacity of its economy, the iron and steel sector has a very crucial part to play because the plants and machineries used in the sector are all imported.
The bank has also shown commitment in improving living standards and booting economic activities of rural dwellers. Its Solar Energy Programme, designed to provide affordable and consistent power supply to homes and micro businesses in rural areas, is up and shinning in six rural communities, one in each of the six geopolitical zones across the country. Some 1,200 homes, each fitted with a 24kw micro grid/stand-alone solar system are already captured. Presently, each home now has sufficient solar electricity to power at least three lighted bulbs and other gadgets.
The bank has indicated its preparedness to partner with all state governments on solar electrification projects in off-grid areas. This is a worthy cause that will surely impact the lives of Nigerians in a sustainable and positive manner.
•Kareem is an entrepreneur and a beneficiary of BOI SME loan.