How To Obtain Bank Of Industry (BOI) Loan In Nigeria
The Bank of Industry is a development finance institution focused on giving loan credit facilities to industrial equipment used in manufacturing. The Bank is entirely possessed by the Federal Government of Nigeria. The bank does not disburse the loan to the borrower in cash but however to the vendors and suppliers of the equipment that the loan application is for.
Target sub-sectors incorporate Agro-processing, Solid Minerals, Information Technology, Oil and Gas and Creative Industry. BOI’s loan support to the SME begins from N5 million. The BOI accepts collateral aside landed property. They also consider the trouble in getting C of O’s and effectively set out on considering the people tof the states influenced.
Start or develop your own business with the assistance of a government-sponsored Start Up Loan. An incredible option for individuals searching for business loans to fund their start up. The BOI has committed time, vitality and cash to helping small businesses flourish.
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. They have branches in states including Abia State, Abuja, Federal Capital Territory, Anambra State, Bauchi State, Benue State, Borno State etc.
BANK OF INDUSTRY
Bank of Industry Limited (shortened as ‘BOI’) is the oldest and largest Development Finance Institution (DFI) as of now working in Nigeria. It is claimed 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 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 different funds.
BOI also manages and disburses the Government Enterprise and Empowerment Program (GEEP), one of many of the social intervention programs presented by the Federal Government of Nigeria. GEEP (also known as MarketMoni) is a ₦140 billion fund planned for giving support to individuals in the informal sector with loans at zero percent rate of interest.
Through the fund, BOI supports trade cooperatives, ladies cooperatives, micro-enterprises and trade associations with loans extending from ₦10,000 to ₦50,000. As a major aspect of efforts to extend and provide wide range of financing opportunities, BOI started partnerships with many state governments under a matching fund program.
The MSME matching fund is a 50:50 partner funding scheme with State Governments to administer the fund for the establishment of micro, small or medium scale businesses in partaking states.
While the Bank under its general risk acceptance requirement obligates a prospective borrower to have at any rate three years satisfactory execution track record, it can also loan to start-ups at its discretion and on a case-by-case pattern. A startup would need to give evidence of related experience in its business field and would need to have an exceptionally qualified management and operational team with sound management structure.
PRODUCTS THAT BOI CURRENTLY SUPPORTS
Bank of industry only help finances enterprises or companies and not an individual person or group of people. The company/enterprise must be properly registered and you will be required to give the registration number to a Limited Liability Company or business name for an enterprise before you can proceed with your application.
MODE OF DISBURSEMENT
The bank does not disburse the loan to the borrower in cash however to the vendors and suppliers of the equipment that the loan application is for.
FUNDS PROVIDED BY THE BOI
BOI’s loan support to the SME begins from N5 million and upwards. In any case, loan beneath N5 million is given on BOI matching fund stage which is operated in a joint effort with various state governments and on our Bottom of the Pyramid (BOP) scheme which is operated through Microfinance Banks.
Coming up next are categories of individuals/businesses qualified to access loans from the BOI;
- Small, medium and huge scale businesses, barring cottage industries.
- New or existing companies, seeking expansion, modernisation or diversification.
- Credit-commendable promoters who will be required to demonstrate their responsibility to the project by contributing in any event 25% of the project cost barring land.
- Borrowers whose management ability, financial situation (counting the accessibility of collateral and guarantee), character and reputation are undeniable.
- Clients with demonstrable capacity to meet loan repayments.
- Borrowers with no record of unpaid loans to erstwhile development finance institutions and different banks.
As a major aspect of the fiduciary responsibility in managing funds under its consideration, Bank of industry requires that you pledge some assets to secure you loan. Be that as it may, the Bank also accepts different forms of security subject to sufficient inclusion of the loan being given to you. Types of security the Bank accepts include:
- Legal mortgage on a landed property. The property must be appropriately registered with a Certificate of Occupancy
- Debenture on assets of the company
- Bank Guarantee
- External Guarantors with Notarized statement of Net worth for loans underneath N10 million.
- Please note that the Bank will share assets previously pledged to different lenders given the Bank’s loan is satisfactorily shrouded in the plan. Also note that the Bank will acknowledge outsider collateral.
PROJECT SELECTION CRITERIA
BOI’s operational framework emphasizes on judicious management and project selection, which is targeted at work creation and poverty mitigation in the nation and supports quality projects with potential developmental effect. The Bank considers industries that meet the accompanying criteria:
- Capacity to substantially add to industrial yield.
- Projects that use to a great extent domestic crude materials.
- Industry in which Nigeria’s relative advantages could be changed over to competitive ones.
- Ability to advance the expansion of exports through the creation of great products that are appealing to domestic and fare markets.
- Niche projects that are delivered for overall consumption. Projects that make both forward and backwards linkages, with the rest of the domestic or regional economy.
- Ventures that advance inter-state or regional incorporation.
- Small and medium enterprises (SMEs) that have linkage with huge firms have a place with clusters and operate under franchise.
- Businesses with high business age limit.
- The project must be in fact feasible, industrially practical and monetarily desirable.
- Projects that are ecologically friendly.
- Businesses that have great management set-up and appropriate bookkeeping procedures.
- Businesses advanced by women entrepreneurs.
The accompanying industrial subsectors are also important in the project selection:
- Textile and Polymer based industries
- Solid minerals
- Information Communications technology (ICT) services.
REQUIREMENTS TO OBTAIN BANK OF INDUSTRY LOANS
- Collateral worth at any rate 150 percent of your expected 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 (in any event 2 or 3 quotations from various sources), where pertinent.
- Three (3) years most late Audited Accounts of the company (for existing company).
- Organizational Structure and Management of the company.
- Three (3) years Tax Clearance Certificate for the Company and two (2) Directors.
- Eight Passport photographs of every one of the two Directors and the Company Secretary.
- A finished duplicate of Bank of Industry Questionnaire.
- Declaration of all outstanding liabilities of the company.
- Statement of Account for the past six months from the company’s bankers
- Acceptable Securities shall incorporate a charge/security interest over the entirety of the candidate’s assets, copyrights, rights and so forth and on the equipment/assets financed as well as the under-listed securities among others.
- Registered Intellectual Property/Proprietary Assets. Assignments everything being equal and Intellectual Property Rights (IPRs) to BOI. The Bank would have directly in the arrangement of valuation of IPRs.
- Joint and Several Guarantees of the Directors of Applicant Company with Notarized Statement of Net Worth.
- Provision of Guarantee spread issued by any financial institution worthy to the bank.
- Insurance spread from any satisfactory/trustworthy insurance company for short-term loaning of not over one year.
- Marketable financial instruments.
- Assignment of receivables/lien on proceeds/deposits and the privilege of set-off.
- First hypothecation charge on all the unmistakable moveable assets under the project.
- Ordinary producers would be required to acquire at any rate 25 percent of the project cost as promoters’ commitment.
- Producers would be required to tie up the advances from the Distributors to cover 35 percent to 40 percent of the financial limit.
- A Trust and Retention Account (TRA) might be kept up for all capital as well as income inflows and outflows. Thus receivables on the sale of all IPRs would be credited to TRA. The modalities of TRA would be turned out on a case-by-case basis to the satisfaction of the Bank, which will have the first charge on the TRA.
FEES INVOLVED IN BOI LOANS
The Bank of Industry is not as profit-inclined as numerous business banks; it is definitely interested in the success of your business adventure.
It is less about furnishing you with the loans and expecting the interests speedily, however about ensuring it fulfills its job of country building. The Bank of Industry also has Business Development Support Providers that assist you in all aspects of your business to ensure you are making genuine success.
The interest rates contrast for both SMEs and Cooperatives. For SMEs, there is no restriction to the most extreme sum that can be accessed. The interest rate is 10% month to month. For Cooperatives, the most extreme sum that can be accessed is N10 million without collateral, rather, with a deposit of 10% of the sum to be gathered.
Just like some other bank, the Bank of Industry will require from a borrower, collateral of good worth. Anyway the Bank of Industry does not require exclusively landed property. It is very adaptable with its collateral interest. They are very much aware of the trouble that is associated with getting certificate of occupancy in numerous parts of the nation.
Aside tolerating landed property as collateral, the bank could also acknowledge different forms of security such as Bank Guarantee; advance installment; guarantees execution bonds from any accredited insurance company.
Acquiring loans from the Bank of Industry is not something you should fear like getting loans from other business banks.
- Interest rate on Term loans: extend somewhere in the range of 5% and 10% per annum.
- Interest rate on Working Capital loans: 12.5% per annum for SMEs, 15% per annum for Large Enterprises
- Appraisal Fee: 1% of loan sum payable on assortment of letter of loan offer. This expense is non-refundable.
- Commitment Fee: 1% of loan sum payable upon acceptance of Loan Offer Letter. This expense is non-refundable.
- Monitoring Fee: 0.125% on the outstanding loan balance payable quarterly financially past due.
- Revalidation Fees: 1% of the loan sum.
- Loan Restructuring Fee: 1% of the restructured sum.
- Penal Charge on Outstanding Balance upon Expiration of Facility Tenor: 2.5% of outstanding sum every month.
- SME Term loan – BOI offers loan products customized to meet the business needs of Small and Medium Enterprises (SME). SME finance is a financing solution accessible for specific business medium term projects.
- Working capital loan
- Graduate Entrepreneurship Fund
- Government Enterprise and Empowerment Program
- Youth Entrepreneurship Support Program
INSTRUCTIONS TO APPLY FOR BOI LOANS
- Visit the BOI website or any of the bank branches situated in the geopolitical zone nearest to you.
- Collect the Bank’s forms
- Complete the BOI Questionnaire
- Submit the forms
- Download copy(ies) of the finished forms.
The Bank of Industry whose reputation is based upon an establishment of uprightness wouldn’t tolerate any type of extortion, corruption or other misbehavior and is focused on working in an honest and transparent manner. Note that the BOI is not just a bank worried about furnishing you with finance, yet are especially interested in the success of your business.
The BOI Loan is one of the means of acquiring funds either for start up businesses or for businesses as of now in activity yet needing funds to boost business. We do trust the steps to acquiring the funds in this article is useful.
Serial Entrepreneur - International Business Planning and Development Consultant - Speaker - Trainer - Author - Blogger - Network Marketing professional.
- 2018 SME Business Trainer and Coaching Advisor at GIZ (Deutsche Gesellschaft für Internationale Zusammenarbeit) for SME Loop.
- 2018 Executive Director/ Project Manager, Dayo Adetiloye Empowerment and Development Initiative
- 2018 YALI RLC Online Cohort 9
- 2017 Fellow, Inspire Africa Train-the-Trainer Entrepreneurship programme sponsored by US Consulate Lagos and the Dickey Center, U.S.A.
- 2016 Fellow, Tony Elumelu Foundation Entrepreneurship Programme
- 2016 CEO, Dayo Adetiloye Business Hub
- 2015 Top 50 Innovative Entrepreneurs, BET5 by Diamond Bank and EDC, PAU.
He is an alumnus of Enterprise Development Centre (EDC) of the Lagos Business School (LBS), Pan-Atlantic University (PAU). And Obafemi Awolowo University (OAU) Ile-Ife, Nigeria.
Through his training, mentoring, speaking and coaching programmes, he has empowered many young people over the years to start and grow their own business, build wealth, create multiple streams of income and achieve financial independence.
- He is a Certified Trainer in Design Thinking by the U.S Consulate, Lagos and the inspire Africa Entrepreneurship Institute.
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