BY OLOWOOPEJO MONSURUDEEN
Efforts by Bank of Industry (BOI) to assist Micro, Small, Medium and Large enterprises in Nigeria has yielded a positive result, after securing €1billion from international capital market to fund cottage industries and big enterprises in the country.
Chief Executive Officer of BOI, Olukayode Pitan, who confirmed funds raised by the financial institution in a statement on Friday, stated that the move was part of President Muhammadu Buhari-led administration promise to create more jobs and entrepreneurs in the country.
Pitan, who hinted that the financial model was oversubscribed by investors, stressed that the model was designed to provide affordable business loan facilities to organisations in the various sectors of the Nigerian economy.
Listing financial institution involve in the funds, he said: “African Export-Import Bank, Credit Suisse, Rand Merchant Bank and Sumitomo Mitsui Banking Corporation were the Joint Mandated Lead Arrangers, Underwriters and Book runners of the Syndicated Medium-term Facility. The investors include the Lead Arrangers, alongside 20 other international financial institutions”.
The Managing Director noted that the financial model was designed to further revitalise Nigeria’s industrial sector towards the creation of over 10 million jobs for the country’s teeming youth population, assuring that the industrial bank was now 100 percent set to finance business ventures and propel the country towards setting novel industrial standard globally.
According to him, the transaction was subsequently launched on 15th January 2020 with an initial size of €750 million. Upon closing on 19th February 2020, the deal was oversubscribed by 60 percent. The deal size was thereafter upsized to a sum of €1 billion.
“With the successful conclusion of this €1 billion medium-term syndicated facility, BOI is poised to catalyze domestic production and job creation on a transformational scale, enhance local industry competitiveness, attract domestic and foreign investments, integrate our local industries into domestic, regional and global value chains, grow our export earnings and positively impact the overall economic development of Nigeria in line with its mandate”, the Managing Director added.
While assuring Nigerians that more Micro, Small, Medium and Large enterprises would benefit from the fund, the Chief Executive Officer reiterated that last year, the Bank of Industry with the support of its various stakeholders disbursed ₦234 billion to 10,145 enterprises, an action that took over 1 million unemployed youths out of the labour market.
The Managing Director explained that the margin recorded between its first successful fundraising event in 2017, in which it raised a total sum of $750 million from 16 international banks and its most recent transaction, which yielded $1.11 billion, was due to its impressive credit ratings, existing ISO certifications in Quality Management Systems and Information Security, and the bank’s relationships with commercial banks in the country, especially in aspects of credit enhancement provision and availability of de-risking tools to its customers.
“Of particular and special note is the support of the Governor of the Central Bank of Nigeria and his Committee of Governors, which was crucial to the success of this transaction.
“The Apex Bank supported BOI throughout the entire process with technical advice and all approvals as required that saw this transaction through from inception to its conclusion. The Central Bank also provided BOI with 100 percent currency swap to mitigate the foreign exchange rate risk. The facility will be disbursed in Naira at single digit interest rate to borrowers with bankable projects”.