Prior to its partial privatisation, the Bank of Industry (BoI) said it had disbursed N781 billion in loans to Small and Medium Enterprises (SMEs) in Nigeria as at December 2014. Managing Director, BOI, Mr Rasheed Olaoluwa, recently disclosed this at a media parley organised by the bank in Lagos.
He said that the bank’s total loan disbursement in 2014 alone was N127 billion, adding that there had been an increase in the bank’s support to both small and large enterprises in the country. The BoI boss said the bank recorded an increase of about 9.3 per cent in its loan and advances portfolio in 2014 from the 2013 figure. He said the bank was focusing on the real sector of the economy with the introduction of Cottage Agro Processing Fund (APF) and NollyFund to support the sector.
Olaoluwa said there had been improvement in BOI debt recovery through the establishment of its Loan Recovery Department which led to the reduction in non-performance loans to 14 per cent in 2014. According to him, BoI recovered N2.9 billion bad debts in 2014 using all available legal instruments. He said the bank’s operation was guided by its Five- Year Strategy Plan 2015-2019 aimed at making BoI Africa’s leading development bank with global best practices. His words: “The bank disbursed a total loan of N127 billion in 2014, bringing BOI’s cumulative disbursements to N781 billion.
“Our mission is to help in transforming Nigeria’s industrial sector by providing financial and business support services”. Executive Director, SME in BOI, Waheed Olagunju, said the risk assets of the bank in the SMEs sector stood at NN683 between 2001 and 2014. Olagunju said that about 1.8 million jobs had been created by the bank through SMEs as at 2014, adding that the impact would have been more if the bank had made more funds available to SMEs. According to him, BOI has increased the number of state offices from seven to 14 to ensure proximity of the bank to more small scale operators in the country.
He said the bank’s loan target to SMEs in 2015 was N15 billion to create additional jobs. Olagunju said that BOI had signed agreement with 10 SME-friendly commercial banks on concessional loans at the rate of six per cent above the 13 per cent MPR. Meanwhile, Bureau of Public Enterprises (BPE) has opened bidding for the appointment of advisors for the privatisation of BOI. This was disclosed by Olaoluwa while speaking in Lagos at a media parley with theme “BOI Impacting on Nigeria Industrial Sector.”
The aim of the privatisation, according to the BoI boss was to enable the bank get more funds for its development mandate. To make the objectives comes to reality, he said that much progress had been made on the privatisation of the bank by the Federal Government in the last few months. He said that BoI’s authorised capital currently stood at N250 billion, of which N146 billion was paid up, adding the bank still had some gaps to fill.
“However, you are all aware that government has been taken steps to privatise BoI. We don’t know the percentage that will be sold; all we know is that it is going to be partial privatisation. “Beyond recapitalisation, our capital has always come from government but we are taking steps that will enable us look for funding from other sources and that is why we are doing some ratings”. The BoI boss said the need to get more funding for the bank’s operation had made the management to embark on aggressive recovery of its non-performing loans. He said that unlike in the past when the volume of non-performing loans was relatively high, the bank had reduced it to below five per cent within a short period.