bank of industry loan boi

How To Apply For Bank Of Industry (BOI) Loan

The Bank Of Industry (BOI) was instituted by the Federal Government of Nigeria with a goal of providing financial assistance to help small, medium, and large projects receive establishment, expansions, rehabilitations, diversification, and modernization of prevailing ones. BOI is currently the largest and oldest Development Finance Institution (DFI) in Nigeria.

It was incorporated as the Nigerian Industrial Development Bank (NIDB) in 1964. In 2001, NIBD was reformed into the Bank of Industry (BOI) as it is known today.

The Ministry of Finance Incorporated (MOFI), the Central Bank of Nigeria (CBN), and private shareholders are stakeholders in the Bank. The MOFI has 94.80% share, CBN has 5.19%, and private individual shareholders have 0.01%. Aliyu Abdulrahman Dikko currently chairs the 11 board-member of the institution.

The Bank has been in the forefront of providing long-term financial assistance to a wide range of industries within the country. They specifically focus on manufacturing companies and others that engage in processing activities. Sub-sectors in its target include Oil and Gas, Agro-processing, Creative Industry, Information Technology, and Solid Minerals.

There was a formal launching of a 10 billion Naira Youth Entrepreneurship support (YES) in 2016 to support youths’ projects and enterprises with loans. A projection of about 36,000 annual jobs are expected to be created through opportunities provided by the organization.

THERE ARE CURRENTLY FOUR SUBSIDIARIES OF THE BANK OF INDUSTRY. THEY ARE:

  1. BOI Microfinance Bank.
  2. BOI Investment and Trust Company Limited.
  3. Leasing Company of Nigeria (LECON)
  4. BOI Industrial and Development Insurance Brokers.

TYPES OF LOANS AND FUNDING PROVIDED BY THE BANK OF INDUSTRY

1. BOI Products

There is a wide range of direct funding products made available by BOI. They include secured loans, asset financing, working capital loans, and so much more.

The funds are handed to businesses under diverse industries. They largely include agro-processing, solid minerals, agriculture, information communication technology, oil and gas, and the creative industry.

They also provide loans with competitive interest rates and with relatively long repayment terms among other incentives they provide.

Many of the loans provided have a kind of structuring that supports a moratorium period where the loan receivers are permitted not to make repayments. Some of the BOI products are listed below:

  • Nollyfund
  • Fashion and Beauty Product
  • Youth Ignite Program
  • ASM Fund
  • Graduate Entrepreneurship Fund
  • Bottom of Pyramid
  • Youth Entrepreneurship Support (Yes) Program
  • Light Manufacturing
  • Solar Energy
  • Food and Agro Commodity Processing
  • On-Lending to Commercial Banks

2. BOI Matching Funds

BOI Matching funds is funding opportunities designed for Small and Medium Enterprises and big corporations inclusive. The funds provided are aimed at boosting economic and industrial growth and a sustainable development within the country.

Through matching funds, BOI partners with state governments, wealthy citizens, and multilateral organizations. Available matching funds include BOI/Dangote foundation matching Funds and BOI/State Matching Funds.

3. BOI Managed Funds

These funds are set aside by either the government, private individuals, or private institutions to give attendance to specific sectors or promote an area of interest. Oftentimes, they are accompanied with multiple benefits to receivers. These include moratorium, lower or zero interest rates, longer tenors, and many other incentives.

BOI directly manages some of these funds under multiple schemes. They are involved in disbursing loans, monitoring, implementations, and recovery of loans. Managed fund include:

  • Cement Fund.
  • Rice and Cassava Intervention Fund
  • BOI/CBN Intervention Fund
  • Sugar Development Council Fund
  • NADDC Fund
  • Cassava Bread Fund
  • National Program on Food Security (NPFS)
  • FGN Special Intervention Fund for MSME (NEDEP)
  • Cottage Fund

WHO ARE ELIGIBLE FOR BANK OF INDUSTRY LOANS?

While the loans provided by the Bank of Industry is projected at promoting economic growth and development, there are some categories of individuals and businesses who may be privileged to receive access to their loans:

  1. Startups, small, medium, and large corporations which include cottage industries.
  2. Existing businesses looking out to expand, diversify, or modernize.
  3. Individuals and promoters who are credit-worthy. They will however be required to show their commitment to their projects by providing at least 25% of the cost aside land property.
  4. Clients who portray ability to repay loans.
  5. Borrowers who have no record of unpaid loans to other banks and institutions.
  6. Borrowers who have capability in managing financial situations including collateral and guarantee.

8 IMPORTANT THINGS TO TAKE NOTE OF BEFORE APPLYING FOR BANK OF INDUSTRY LOAN

BOI bank of industry

1. BOI Mandate

BOI focuses largely only on businesses that manufacture products and others that engage in processing activities. Sub-sectors they target include Solid Minerals, Oil and Gas, Creative Industry, Agro-processing, and Information Technology.

Below are few of the product clusters supported by BOI:

  • Cosmetics/Hair Products
  • Aquaculture
  • Bottled Water
  • Laundry and Dry Cleaning
  • Fish Smoking/Drying
  • Foundries/Metal Fabrication/3-D Printing
  • Laboratory/Orthodontist/Ophthalmology/Physiotherapy)
  • Adire (Tie and Dye)/Aso Oke
  • Digital Printing/Multimedia Publishing
  • Grocery packaging
  • Chemicals and Paints
  • Blocks and Interlocking Stones
  • Animal Feeds
  • Fashion/Garmenting
  • E-Commerce/Information & Communications Technology (ICT)
  • Food Processing (comprising processing of agricultural products)
  • Bakery
  • Health Care (Medical Diagnostics)
  • Doors and Window Frames
  • Ceramics & Tiles
  • Soaps and Detergents
  • Liquefied Petroleum Gas/Compressed Natural Gas
  • Dairy
  • Light Manufacturing (Paper, Roofing Sheets, lube blending, Paints, etc)
  • Furniture/Wood Processing
  • Movie Production (Nollywood)
  • Leather/Footwear
  • Technical/Vocational Schools (Offering City & Guild Certificate)
  • Fruit Juice
  • Quick Service Restaurants
  • Meat Processing
  • Gemstones
  • Water Transportation Riverine
  • Solar (off grid)
  • Greenhouses
  • Mechatronics
  • Plastics
  • Roofing Sheets
  • Theme Parks
  • Recycling
  • Quarries

2. BOI Financing Focused Items

The Bank Of Industry finances industrial equipment that are employed in manufacturing processes. You are not going to get financing for buildings and lands. You can get access to the requirements of your working capital from the banks currently in partnership with BOI at Monetary Policy Rate plus 6%.

According to Bank Of Industry website (last update: 2014) The 10 Banks BOI partners with to fund SMEs are StanbicIBTC BankPlc, Ecobank Limited, Access Bank Plc, Fidelity Bank Plc, First City Monument Bank Limited, Diamond Bank Plc, First Bank Limited, Skye Bank Plc, United Bank for Africa Plc, and Standard Chartered Bank Limited.

3. BOI Financing Focused Entities

You cannot apply for a loan from BOI as an individual. They finance only companies and enterprises. The enterprise or companies seeking loans must also be appropriately registered.

For a Limited Liability Company, you’ll be required to provide the company’s registration number, and for an enterprise, you’ll be required to provide the registered business name of the enterprise before going ahead with the application.

4. BOI Funding Limits

Loan support provided to SMEs begins from five million Naira (N5,000,000). Provisions for cash loans below N5 million is made available on their matching fund platform which functions in partnership with several state governments and on their Bottom of the Pyramid (BOP) scheme that functions through various MicroFinance Banks. To apply under the BOP scheme or BOI matching Fund, check www.boi.ng/bottom-of-pyramid for further information.

5. Loan Disbursement

Loans applied for are not directly disbursed in cash to the applicants. They are disbursed to vendors and suppliers of equipment to the loan applicant. This is a way to ensure that loans are effectively harnessed for their purposes.

6. BOI Requirements on Collateral

As a way to responsibly manage funds placed under its supervision, BOI requests that you provide some assets as a way of securing your loan. There are also other forms of security that should expectedly cover the loan provision made available to you. BOI accepts bank guarantee, legal mortgage on land properties which must have been registered with a certificate of occupancy, debenture on assets of the company, external guarantors with Notarized statement of Net worth (for loans that are lesser than N10 million).

Be aware also that the bank is willing to permit sharing assets formerly pledged to other lenders, as long as the Bank’s loan is sufficiently covered in the plan. BOI also permits third party collateral.

7. Startup Businesses

BOI demands a minimum of 3 years acceptable performance track record for a potential borrower. However, startups can also benefit from its loans based on the discretion of the bank. Startups will be required to make available evidence of cognate experience in the area of its business along with a highly qualified operational and management team with a sound management structure.

8. Required Application Documents

There are required documents you’ll be expected to provide while applying for a loan. You can either apply physically or apply online.

CHECKLIST FOR LOANS UP TO N10 MILLION (BOI LOAN REQUIREMENTS)

  1. Formal Application letter provided on a letterhead and an appropriately filled application form.
  2. Form of registration and Certificate photocopies.
  3. Well detailed business plan also containing Curriculum Vitae of the major management staff and an accurate profile of the Business enterprise.
  4. Proforma invoice for the projected equipment to be bought.
  5. Provide declaration of Outstanding liabilities to other individuals or banks if you have any.
  6. Quotations and sources for raw materials stated in quantity.
  7. In case your business operates from rented properties, there must be a tenor of a minimum of one year beyond prospective loan tenor.
  8. Existing businesses should provide bank statements for their enterprise covering at least one year.
  9. Promoters should provide photocopies of Driver’s License or International Passport or National Identity Card or Permanent Voter’s Card along with their BVN and Four (4) passport photographs.
  10. Two external guarantors with ideal means of identification. These should include Identity cards, BVN, passport photographs and Letter of Intent to guarantee the loan.
  11. If a borrower is providing landed property to secure the loan, then the documents listed below should be provided:
  • Certificate of Occupancy, Deed of Assignment/Conveyance, or Deed of Sublease.
  • Valuation Report provided by any of BOI’s accredited valuers.
  • Certificate of Tax Clearance of owner as obtained from the state of property location.
  • Form of identity of owner.
  • Proof of Ground Rent payment up to date.
  • BVN and 4 passport photographs of owner.
  • Letter of Consent provided and signed by the owner of the property to mortgage property to BOI.
  • A property owned by a limited liability company should have company Board Resolution provided.

HOW TO APPLY FOR A BOI LOAN

  • To apply for Bank Of Industry (BOI) Loan, visit apply.boi.ng.
  • Click “Register”
  • A new page will come up asking if your company is registered, select appropriately.
  • Follow prompts to complete the BOI loan application.
  • Alternatively, you can also visit any commercial bank in Nigeria to apply for Bank Of Industry form. Some forms will be given to you which you are expected to complete. You will also need to provide all necessary documents.

boi office

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