Bank of Industry (BOI) loan
The Bank of Industry (BOI) is an institution of development financing (DFI). It is the largest and longest-running development finance institution in Nigeria. It's the successful successor firm that was founded by that the Nigerian Industrial Development Bank (NIDB) that was founded in 1964. It was renamed the Bank of Industry, as it is today known, recapitalized and transformed in 2001.
The BOI is in partnership with several partners, including the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), the Federal Ministry of Industry, Trade and Investment as well as the Federal Ministry of Finance, the Central Bank of Nigeria (CBN) and various other public and private sector organizations. It is also a part of other DFIs, such as the Development Bank of Nigeria (DBN) and the Bank of Agriculture (BOA).
The bank's primary goal is to provide long-term financial assistance to the industry segment of the Nigerian economy. It focuses on offering loans to medium and small businesses (SMEs) and larger companies. Credit may be provided to more recent companies. It can also be used to increase, diversify and modernize existing businesses.
The Bank of Industry currently has four subsidiaries, which include:
- BOI Investment and Trust Company Limited
- BOI Microfinance Bank
- BOI Insurance Brokers for Development and Industrial
- Leasing Company of Nigeria (LECON)
Types of loans and funding are available via the Bank of Industry.
The Bank of Industry has a range of direct financing products. These are in the form of asset financing, secured loans, working capital loans and much more.
The BOI gives funds to businesses across various industries. These include agriculture, agro-processing, information communication technology, oil and gas solid minerals, and the creative sector.
Read also : Federal Government loan for businesses.
A competitive interest rate is offered with long repayment terms and other incentives to support. The loan terms vary from one to five years (and beyond). Most loans are structured in a manner that allows for an incubation period or moratorium, meaning that borrowers aren't obliged to make payments.
- ASM Fund
- The Bottom of the pyramid Pyramid
- Beauty and Fashion Product
- Light Manufacturing
- Processing of Agro and Food Commodities
- Graduate Entrepreneurship Fund
- Loans to Commercial Banks
- Solar Energy
- Youth Entrepreneurship Support (Yes) Program
- Youth Ignite Program
BOI managed funds
Intervention funds, also known as managed funds, are set aside by the federal government or private institutions, or individuals to be used to influence a particular area or to meet an interest.
The funds typically have a range of benefits, such as low or no rate of interest, faster tenors, and moratoriums, among other benefits.
Certain funds are administered via the Bank of Industry under various schemes. When managing these funds, BOI is involved in BOI plays a role in the disbursement process, implementation, surveillance and recovery.
Read also : CBN loan worth up to ₦2billion Naira.
Managed funds are:
- BOI/CBN Intervention Fund
- Cassava Bread Fund
- Cement Fund
- Cottage Fund
- FGN Special Intervention Fund for MSME (NEDEP)
- NADDC Fund
- National Program on Food Security (NPFS)
- Rice and Cassava Intervention Fund
- Sugar Development Council Fund
BOI matching funds
Matching funds are designed to increase the possibilities of funding for SMEs as well as larger companies. These funds, which are dedicated to a specific purpose, will help to propel the development of Nigeria's industry, sustainable development and economic growth in Nigeria.
With matching funds, the BOI cooperates with other institutions, such as states, multilateral organizations, and wealthy people.
Matching funds are:
- BOI/State Matching Funds
- BOI/Dangote Foundation Matching Funds
Eligible for the Bank of Industry loan
To be eligible to receive a Bank of Industry loan, your company or business has to register with the Corporate Affairs Commission (CAC). To be eligible, you need an e-registration number for a Limited Liability Company or a Business Name.
The following sectors have priority
- Agro-allied-textiles, leather and textiles
- Polymer-based (plastic rubber, wood, etc.)
- Solid minerals
- Information and communication technology (ICT)
You must also be able to meet one of these general lending requirements:
- The ability to increase the industrial output of Nigeria
- Projects that are primarily based on domestic raw materials
- Industries in which Nigeria's advantages can be converted into more competitive industries
- High-quality products are produced to be sold on the market domestically
- Capacity to facilitate the expansion of exports to the world.
- Projects that can be integrated into existing supply chains
- Projects that foster interstate or regional cooperation
- Companies that employ lots of workers
- Projects that are technically feasible as well as commercially feasible
- Projects that are green and environmentally green
- Businesses that are well-run with efficient bookkeeping or accounting methods
- Businesses that women entrepreneurs power
How do you make an application for a Bank of Industry loan?
You can apply for a Bank of Industry loan by phone or online. The BOI has several regional offices across Nigeria.
If you are applying for BOI financing, it is possible to go through a lengthy application process. There are only some loans that meet the same criteria. Also, the requirements will vary according to the scale of your company (micro, small, medium or large company) and the quantity you're seeking.
In addition, you'll need to supply the standard documentation, such as financial statements, information on the collateral you're offering and the description of your business, as well as a list of the purpose you're planning to utilize the loan for as other details.
A list of the things you'll need could include:
- The loan application must be completed.
- Certificate of Incorporation
- Memorandum of Understanding and Articles of Association
- Business plan
- Study on feasibility
- A quotation for the purchase of equipment or machinery
- Quote for the supply of raw materials
- Identification methods (passport driving license, passport permanent voters' card)
- Passport photos as well as Bank Verification Number (BVN).
- Audited financial statements
- Bank statements of the company
- Tax clearance certificate
- Current liabilities are declared in the declaration.
- The details of the security or collateral that is offered
- Lease agreement (if it is based on a rented property)
Business development service providers
To address specific issues small businesses face when trying to gain access to credit; the BOI has joined forces with many Business Development Service Providers (DSPs). These SME consultants are available throughout Nigeria and are classified as regional/zonal, national and state.
These BDSPs are required to offer various services, including:
- Finding SMEs with creditworthiness
- Aiding SMEs in the creation of business plans and proposals needed to gain access to Bank of Industry funds
- Offering mentorship and advising SMEs on the best practices
- Helping SMEs in building relationships with larger businesses and buyers as well as suppliers throughout the value chain
- Helping to assist the BOI in the monitoring of SMEs after funding
While certain BDSPs offer a nominal fee, they also offer free assistance.
Commonly requested questions (FAQs)
What are the items that the Bank of Industry finance? Bank of Industry finance?
The Bank of Industry primarily finances industrial equipment that is utilized in the production of. The BOI is not able to finance the purchase of buildings or land. You can seek funding alternatives if you have additional general needs for working capital.
What is the procedure for how the Bank of Industry disburses the loan?
The loan is not released directly to the applicant if your loan application is successful. Instead, the money will be advanced to the manufacturers and suppliers of the equipment for which the loan application is intended.
What is the maximum amount I can get from the Bank of Industry?
Generally speaking, you're permitted to get a minimum five million Naira loan. Requests for loans less than 5 million Naira may be accepted through the BOI's matching fund platform and the Bottom of the Pyramid (BOP) scheme.
Do the Bank of Industry require collateral?
Yes, The Bank of Industry requires you to pledge specific assets for collateral. However, the collateral you pledge is not required the physical properties. Different forms of security can be accepted. These include:
- Legal mortgage for the property
- Assets of the company secure the company's debts.
- Garantie for banks
- Third-party or external Guarantors
- Third collateral of a third party
- Assets that were previously pledged by other lending institutions (as long that the loan of the BOI is sufficiently covered)
Does my start-up be funded by the Bank of Industry fund my start-up?
While banks generally require that any potential borrower have an established company with a proven track record, it can grant start-up loans. When the bank wants to provide funding for a new venture, the applicant must have an appropriate business plan and proof of proficiency in the particular business field.
What is the interest rate that the Bank of Industry charges? Bank of Industry charge?
The Bank of Industry interest rate is usually 9 per cent per year. The rate could be higher or lower based on the particular scheme or product of finance used. There could be additional relevant charges like an appraisal, processing, commitment, and monitoring fees.
How do I find out your Bank of Industry loan term?
The loans granted by the BOI are backed by a term between 12 and 60 months. Depending on the specific period of the loan and the loan amount, a moratorium, as long as 12 months, can be available.
What is the time frame that it takes for the Bank of Industry take to approve the loan?
If all the required documents are in place, obtaining a loan typically takes 30 to 40 days. A longer time is required to handle larger loan requests.
What kinds of businesses does the Bank of Industry support? Bank of Industry support?
The BOI offers a range of product groups, which include but are not restricted to:
- 3D printing
- Animal feed
- Stones that interlock and blocks
- Bottled water
- Ceramics and tiles
- Paints and chemicals
- Hair and cosmetic products
- Multimedia publishing and digital printing
- Window frames and doors
- Drying and smoking fish
- Food processing
- Fabrication of metals and Foundries
- Fruit juice
- Wood processing and furniture
- Grocery packaging
- Healthcare (medical diagnostics)
- Information and communication technology (ICT)
- Dry cleaning and laundry
- Light manufacturing (lube blending, paper, paints etc.)
- Natural gas compressed natural gas.
- Processing of meat
- Movie production (Nollywood)
- Sheets of roofing
- Detergents and soaps
- Solar (off-grid)
- Schools of technical and vocational training (offering city and guild certificates)
- Theme parks
- Transportation by water
Read also : CBN policy on bank charges.