The Bank of Industry (BOI), reputed to be Nigeria’s oldest development financing institution, commenced operations as Investment Corporation of Nigeria (ICON) in 1959, incorporated as Nigerian Industrial Development Bank (NIDB) in 1964 and later reconstructed into BoI in 2001.
In this interview culled from Internationalbanker.com, BoI’s Managing Director/CEO, Mr. Olukayode Pitan, narrated the bank’s impact on small and medium enterprises (SMEs) in Nigeria over the years. Excerpt.
The bank’s development orientation is towards supporting projects with high developmental impact such as job creation and poverty alleviation to enhance the socio-economic standard of Nigerians. Any statistics to back this up?
Indeed, BOI’s developmental mandate is geared towards supporting projects with the capability to generate considerable multiplier effects, such as business linkages, job creation and poverty alleviation, which would positively impact the socio-economic condition of Nigerians.
Over the past few years – 2015 to 2018 – BoI supported 4,908 SMEs and large enterprises across the country with N529.4 billion in loan disbursements. We have also developed youth-centric products – Youth Entrepreneurship Support Programme (YES-P) and the Graduate Entrepreneurship Fund (GEF) – and trained 14,000 youths in entrepreneurship and other business-management modules. A total of N1.8 billion has also been disbursed to 726 beneficiaries under these programmes.
BoI has also partnered with the federal government to implement various social-intervention programmes. As a result, we have facilitated the disbursement of N29 billion to 1.55 million beneficiaries nationwide under the Government Enterprise and Empowerment Programme (GEEP) and N15.34 billion to 199,989 beneficiaries under the N-Power Programme.
All of these efforts have led to the creation of an estimated 4 million direct and indirect jobs.
Do you feel that Nigeria’s SME sector is being adequately supported by BoI? What are some of the most significant SME projects with which the bank has been involved in recent times?
Over the past four years, the bank has more than quadrupled the support for SMEs from N7.4 billion in 2015 to N32.8 billion in 2018, and we will do even more this year, 2019. One of our targets is to increase the share of our loan book in favour of MSMEs as opposed to large enterprises.
The enterprises we have supported over the years have cut across several sectors, from agro-processing to creative industries, engineering, technology, fashion, renewable energy, healthcare and pharmaceuticals. In the creative-industries sector, for example, we supported the likes of Filmhouse Cinemas, Silverbird Cinemas, Terra Kulture Arts and Studios Limited. Today, these companies keep growing so big and continue to provide employment for young Nigerians.
What do you consider to be the most challenging aspect of being MD/CEO of Bank of Industry? And similarly, what is the most rewarding aspect?
One of the biggest challenges I face as the MD/CEO is ensuring that the bank is adequately funded. When I joined BoI, I quickly realised that there was a need for the bank to become financially sustainable by being self-funding, given the fact that government resources are limited and the financial requirements of the Nigerian industrial sector are huge.
I am glad to say that we have made significant progress in this regard, as we were able to raise about $1.5 billion in the last 18 months. These include a $750-million syndicated loan facilitated by Afrexim Bank (African Export-Import Bank) and 15 other international financial institutions, $200 million from the Nigerian Content Development and Monitoring Board (NCDMB) for oil and gas businesses, $100 million from the Africa Development Bank (AfDB) and a N100-billion ($326-million) Industrial Fund from the Central Bank of Nigeria.
We also recently signed a MoU (memorandum of understanding) with the Export-Import Bank of China for a $500-million line of credit to fund modular refineries. We are also in the process of finalising the conditions precedent to the drawdown on a $40-million line of finance approved for the bank from the Islamic Development Bank (IDB). Additionally, through our partnership with the Brazilian Development Bank (BNDES), the bank was granted a $20-million line of credit to support financing the purchase of equipment manufactured in Brazil by Nigerian companies.
We try to do this as much as possible while remaining profitable – our net profit in 2018 was in excess of $100 million.