House Commends BoI’s Disbursement of Intervention Fund

The House of Representatives committee members on industry, trade and investment have lauded the Bank of Industry (BoI) for its disbursement to support industrial and entrepreneurship development in the country. The commendation was made when the committee members, led by the Chairman, Abubakar Moriki, embarked on an oversight function to some of the industrial firms supported by the Development Finance Institution (DFI) in Lagos.

The commendation came as the BoI stated that it has set aside about N50billion for genuine food processing companies in the country, to save the huge foreign exchange the country spends yearly on food imports while also achieving food security for the nation’s growing population.

Moriki stated that the DFI has a crucial role to play in revamping industries that have gone moribund as a result of inadequate funding to carry out their operations.

According to him, the bank’s mandate to drive industrial growth in the country has helped to save the country from spending its hard earned foreign exchange on products it has the competitive and comparative advantage of producing.

“The committee is here in Lagos to oversight the activities and operations of the BOI. We are here to interface with them and also to know their challenges. We have been briefed of the bank’s historical evolution and its equity structure, balance sheet over the years and indeed, I will say at this juncture that as a typical development finance institution, the bank is doing very well”, he said. He however called on the management of BoI to seek ways on how to reach a balance on how to make its intervention funds more accessible to prospective customers without compromising on its stringent conditions.

On the stringent conditions put in place by the bank for prospective customers to access BoI loans, he said the loans have to be protected, but stated that this move by the bank would not deter more prospective customers to access loans from the bank. “We want them to see the aspirations of people against the background of the stringent conditions put in place in order to see how a balance can be reached between the stringent conditions and the wishes of the people to have soft loans without conditions. By so doing, something could be achieved in the interest of the bank not without compromising the conditions which would also be possible for the prospective industrialist to take advantage of the financing,” he said.

The Managing Director, BoI, Olukayode Pitan, represented by the Executive Director, SME, BoI, Waheed Olagunju, said more than 96 per cent of its risk assets are performing, maintaining that the bank closed the financial year of 2016 with a non performing loan (NPL) ratio of 3.7 per cent, which he described as the lowest in the country. “The industry average of that year went up to about 15 per cent put against the Central Bank of Nigeria’s (CBN’s) threshold of 5 per cent.

He said so far, with the support of the federal government and the National Assembly, the bank was able to guarantee a line of credit worth over $500 million from the Africa Development Bank (AfDB) that required a sovereign guarantee.