Worried by inability of SMEs to access its loans as a result of badly presented applications, the Bank of Industry (BoI), at the weekend unfolded plans to partner Business Support firms (BSFs) to drive its intervention agenda in the small and medium enterprises sector.
Besides, the bank also expressed its resolve to explore new funding alternatives in a bid to realise its mandates, following the pressure, which has continued to mount on government’s resources in terms of financing.
The bank noted that it was seeking new funds to make impactful contributions to Federal Government’s National Industrial Revolution Plan (NIRP) as well as serve the underserved, particularly the small and medium enterprises.
Addressing journalists in Lagos, Rasheed Olaoluwa, managing director, BoI, noted that the bank was developing strategies to improve stakeholders’ access to funds.
“BoI is trying to achieve a balance in its functions as a development finance institution in terms of delivering social impact and maintaining a sustainable loan infrastructure.
“We have met with Business Support Firms to address the large percentage of substandard loan applications as we have discovered that a good way out is to engage with BSFs who will receive the applications and help review them as they better understand how a bankable proposal should look like,” he said.
He added that the SME sector would receive adequate attention from the development bank and their funding challenges addressed through concrete and visible steps.
“Although we are confident that key shareholders in the NIRP initiative like the Ministry of Finance Incorporated and the Central Bank of Nigeria CBN, will continue to support the bank with some equity injection, but considering the fact that there is a lot of demand on government’s resources, we are exploring alternative modes of funding such as continuation of sector specific intervention funds by the CBN, Ministry of Agriculture, Solid Minerals and others; managed funds from various state governments and foundations; long-term loans at very low interest rates from multi-lateral/international development institutions,” he said.
He added that BoI would also explore domestic and international bond issuance and other sustainable annuity sources that may become statutorily imperative in the medium to long term.
He disclosed that in pursuance of the success of President Goodluck Jonathan’s transformation agenda, a major focal point of the bank was to help promote employment generation and wealth creation through access to development funds.
“We have met with Business Support Firms BSFs to address the large percentage of substandard loan applications as we have discovered that a good way out is to engage with BSFs who will receive the applications and help review them as they better understand how a bankable proposal should look like,” he said.
“As you are aware, our Honourable Minister in the Ministry of Industry Trade and Investment, Olusegun Aganga, is leading the efforts to industrialise Nigeria and to create millions of jobs in the process. At BoI, we’re passionate about these objectives,” he said.
He said that he had also met and discussed with the Minister of Agriculture and Rural Development, Dr. Akinwumi Adesina on issues relating to the various agricultural development funds managed by BoI as part of the minister’s efforts to transform Nigeria’s agricultural sector.
“We are in agreement that there is room for wider collaboration between his ministry and BoI, especially in the area of financing the agricultural value chain,” he said.
He unfolded the bank’s agenda to pursue good corporate governance; sharp focus on its core mandate; sound risk management and compliance; venture capital investments; partnerships and collaborations; customer service responsiveness and create linkages between innovation and industry.