The (BOI) is Nigeria’s oldest, largest and most successful development financing institution. It was reconstructed in 2001 out of the Nigerian Industrial Development Bank (NIDB) Limited, which was incorporated in 1964. The bank took off in 1964 with an authorized share capital of 2 million (GBP).
BOI’s mandate is to provide financial assistance for the establishment of large, medium and small projects in Nigeria as well as the expansion, diversification and modernisation of existing enterprises; and rehabilitation of existing ones.
However, to enjoy financial and business support services from the BOI, certain conditions have to be met.
The bank of industry targets businesses that engage in manufacturing and processing activities. Target sub-sectors include Agro-processing, Solid Minerals, Information Technology, Oil and Gas and Creative Industry.
The list of SME product clusters that BOI supports contains the following: Adire (Tie and Dye)/Aso Oke, Animal Feeds, Aquaculture, Bakery, Blocks and Interlocking Stones, Bottled Water, Ceramics & Tiles, Chemicals and Paints, Cosmetics/Hair Products, Dairy, Digital Printing/Multimedia Publishing, Doors and Window Frames, E-Commerce/Information & Communications Technology (ICT), Fashion/Garmenting.
Others are: Fish Smoking/Drying, Food Processing (comprising processing of agricultural products), Foundries/Metal Fabrication/3-D Printing, Fruit Juice, Furniture/Wood Processing, Gemstones, Greenhouses, Laundry and Dry Cleaning, Leather/Footwear, Liquefied Petroleum Gas/Compressed Natural Gas, Meat Processing, Mechatronics, Health Care (Medical Diagnostics), Laboratory/Orthodontist/Ophthalmology/Physiotherapy), Movie Production (Nollywood), Plastics, Quick Service Restaurants, Quarries, Recycling, Roofing Sheets. The Bank also supports businesses in Soaps and Detergents, Solar (off grid), Technical/Vocational Schools (Offering City & Guild Certificate), Theme Parks, Water Transportation Riverine, Light Manufacturing (Paper, Roofing Sheets, lube blending, Paints etc), and Grocery packaging. In total about 41 lines of businesses are listed.
However, if your product is not listed here and you think it should, BoI creates a window whereby you can still be accepted when you provide them with information on your product for review by its technical team. In the next edition we look at other basic thing you should know before approaching BoI for a business loan.
2. Entities that BOI Finances
Bank of industry only finances enterprises or companies and not an individual person or group of persons. The company / enterprise must be duly registered and you will be required to provide the registration number for a Limited Liability Company or business name for an enterprise before you can proceed with your application.
3. Items that BOI can finance
The bank is principally set up to finance industrial equipment used in manufacturing. The Bank does not finance land and building which are expected to be financed from equity. You can also access your working capital requirements from any of the ten (10) SME friendly banks that Bank of Industry partners with at Monetary Policy Rate plus 6 percent.
4. Mode of disbursement
The bank does not disburse the loan to the borrower in cash but to the vendors and suppliers of the equipment that the loan application is for.
5. Amount that can be financed by BOI
BOI’s loan support to the SME starts from N5 million. However, loan below N5 million are provided on our matching fund platform which is operated in collaboration with various state governments and on our Bottom of the Pyramid (BOP) scheme which is operated through MicroFinance Banks. Click to see how you can apply under the BOI matching Fund or the BOP scheme.
6. Collateral requirements
As part of the fiduciary responsibility in managing funds under its care, Bank of industry requires that you pledge some assets to secure you loan. However, the Bank also accepts other forms of security subject to adequate coverage of the loan being provided to you. Types of security the Bank accepts include:
- Legal mortgage on a landed property. The property must be duly registered with a Certificate of Occupancy
- Debenture on assets of the company
- Bank Guarantee
- External Guarantors with Notarized statement of Networth for loans below N10 million.
Please note that the Bank is willing to share assets previously pledged to other lenders provided the Bank’s loan is adequately covered in the arrangement. Also note that the Bank is willing to accept third party collateral.
7. Startup businesses
While the Bank under its general risk acceptance criteria requires a prospective borrower to have at least three years acceptable performance track record, it can also lend to start-ups at its discretion and on a case-by-case basis. A startup would need to provide proof of cognate experience in its business area and would need to have a highly qualified management and operational team with sound management structure.
8. You need to support your application with some documents
Please go to the to see the list of the documents you should be prepared to upload while applying.
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