Bank of Industry (BOI)

The Bank of Industry (BOI) is owned by the Federal Government of Nigeria. This bank emerged from the government’s rationalization of some development Finance Institutions (DFIs) namely the Nigerian Bank for Commerce (NBCI), Nigerian Industrial Development Bank (NIDB) and the Nigerian Economic Reconstruction Fund (NERFUND).

LOCATION

Bank of Industry House
63/71, Broad Street,
P. O. Box 2357, Lagos.

SHAREHOLDING:

NAME:UNITS %
Min. of Finance Incorporated 297,688,401 59.54
Central Bank of Nigeria 201,822,645 40.36
Nigerian citizens and associations 488,954 0.10

The Bank of Industry has four subsidiaries from its merger with the NIDB:

  • Leasing Company of Nigeria (LECON)
  • NIDB Trustees Limited (NTL)
  • NIDB Consultancy and Finance Limited (NIDB Consult)
  • Industrial and Development Insurance Brokers (IDIB)

FACILITIES

  • Initial capital base of N50 billion
  • Six zonal offices
TYPES OF PROJECTS FINANCED BY BOI
  • Projects in the areas where Nigeria has comparative advantage
  • Projects that engage in the efficient conversion of local raw materials into finished products
  • Ventures that can be least cost producers of good quality products that could be successfully marketed locally and/or internationally.
PRODUCTS AND SERVICES DELIVERABLE BY BOI
  1. Medium and Long-term loans.
  2. Working Capital Finance
  3. Equity Financing
  4. Management of dedicated funds
  5. Loan guarantees
  6. Co-financing
  7. Investments in Corporate Boards
  8. Business Development Services
  9. Lease financing
  10. Trusteeship
  11. Stock Brokerage
  12. Foreign Exchange Dealership
  13. Insurance Brokerage
REFORM PROPOSALS OF THE BANK

The BOI is intended to focus on the private sector in both funding and commercial operations. The Bank has opted to adopt the existing prudential guidelines for Banks though more stringent when compared with the CBN proposal to apply some standards used by other finance companies for BOI.

The capitalization of BOI should be indexed against a strong currency preferably United States of America Dollar. This is particularly important to meet the Debt-Equity ratio criteria set by international funding agencies to enable BOI enjoy their patronage.

BOI would focus on SMEs with linkages within the broad economy with a view to enhancing overall industrial interaction, expanding output and employment and utilizing local resources to its fullest advantage. The huge SMIEIS funds currently accumulated by the Banks will help BOI fulfil its mandate.

THE DEVELOPMENT FINANCE SECTOR ISSUES.

The reduction of all six existing DFIs to two; (BOI and NACRDB) has narrowed the playing field and streamlined the operations of the DFIs. The Nigerian Industrial Development Bank (NIDB), the National Economic Reconstruction Fund (NERFUND) and the Nigerian Bank for Commerce and Industry (NBIC) have been brought together to form the Bank of Industry. On the other hand, the Family Economic Advancement Programme (FEAP), Peoples Bank of Nigeria (PBN) and the Nigerian Agricultural and Cooperative Bank (NACB) have become a single Bank, the Nigerian Agricultural, Cooperative and Rural Development Bank (NACRDB).

These institutions, before the Government took the decision to merge them, were unable to perform their roles effectively due to the following reasons:

  1. Low Capitalization
  2. Inefficient Operations
  3. Poor loan portfolio
  4. Poor Liquidity
  5. Inability to access external lines of credit, and
  6. Lack of capacity to finance projects

FINANCIAL PERFORMANCE FOR 5 YEARS:

PROFIT AND LOSS ACCOUNT
19981999200020012002
Income747,375998,5921,151,387748,4841,299,964
Expenses727,006975,9891,434,6901,914,179854,128
Profit after tax14,22814,70814,916958,706435,636

BOI corporate Plan 2003 – 2007:

The estimated available funds during 2003 – 2007 are shown below:

 2003

N’ billion

2004

N’ billion

2005
N’ billion
2006
N’ billion
2007
N’ billion
Equity     
Existing3.75    
Incremental3.3333.3333.3333.3333.333
Sub-Total7.0833.3333.3333.3333.333
Borrowing3.0008.5579.1529.77610.431
Grand Total10.08311.89012.48513.10913.764
PROSPECTS

It is expected that the bank’s contribution to the economy will grow stronger as the implementation of the economic reforms progresses to widen the scope of needs for economic/business development financing