Functions Of Bank Of Industry Nigeria

Bank of industry / functions of bank of industry Nigeria in 2018

Bank of Industry Limited began operations in 1959 as the investment Corporation of Nigeria (ICON) Limited. In 1964, ICON Limited was reconstituted to become the Nigerian Industrial Development Bank (NIDB) Limited under the guidance of the World Bank. Initially, International Finance Corporation (IFC) held 75% equity in NIDB and produced the first Managing Director.

Bank of Industry Nigeria Overview

Bank of industry is a commercial and/or development bank, established to assist businesses that are into manufacturing and processing financially. Since its mandate is targeted towards the industrial sector of the economy, the Nigeria Bank of industry is saddled with the responsibility of financing equipment used in value chain production.

The primary aims of setting up the Nigeria Bank of industry was to make financial provision for the industrial sector of the economy, including business support services.

Functions of Bank of Industry Nigeria

Below are the main functions of bank of industry Nigeria

Functions of Bank of industry Nigeria

1. It Disburses Funds To The Suppliers Of Equipment

On major function of the Bank of Industry is that, in line with the equipment businesses require to carry out its production, the Nigeria Bank of industry would disburse funds to the manufacturers or the suppliers of these equipment so as to supply businesses these equipment.

Since it is the Boi would finance the equipment in this context, it is therefore, incumbent on the Nigeria Bank of industry to make sure that proper finding is made, and the Bank has to ensure that all documents from the suppliers are vetted in order to prove the genuineness of the quotations and the equipment.

2. It Helps Businesses Source For Working Capital Requirements

One of the functions of the Boi is that, it do assist businesses in sourcing for their working capital requirements, and this is done through organizations who partners with the Bank of industry.

READ ALSO  Investment Banker Salary: How Much Do Investment Bankers Make

It is not the duties of the Boi to finance working capital, but since the Bank of industry has gotten a network of partners, which of course, are other financial institutions, so what the Bank does is to enter into a negotiation terms with these banks, the terms has to do with small and medium scale enterprise financing.

Therefore, in such situation, since the bank only finance equipment, when businesses apply for equipment financing, any business that would want the Boi to help source for its working capital can also apply along side with the application for equipment financing to the Bank of Industry, and because the Bank of industry is surrounded by a network of participating banks, the two loans would be provided.

3. It Finances Plant And Equipment

The Bank of Industry main objective is to promote industrial sector of the economy, in doing so, it is targeted at financing plants and equipment only. Financing raw materials and working capital of businesses are not in its financing preferences, lest alone financing lands and buildings.

One of the core mandate of the Boi is primarily, that of financing industrial equipment. For instance, if someone is into agriculture business, area of financial assistant from the Nigeria Bank of industry would be that of equipment, therefore, the equipment that agriculture business would need for the production of its goods would be what the Nigeria Bank of industry would financed. In this case, it could be some farm or agriculture equipment, such as, tractors, and combine harvesters, and dryers, and freezers, and other such agriculture machineries.

READ ALSO  Top 10 Ways To Save Money:For Wedding, Christmas or Holiday in 2018

4. The Bank of industry requires collateral but is very flexible about its collateral requirements.

Many prospective borrowers are put off by the requirement for collateral to back their borrowing. Obtaining a Certificate of occupancy (C of O) for landed property in many parts of Nigeria is a herculean task and this has prevented many a business from accessing finance. This is one of the usual concerns that most borrowers have. The good thing is that the BOI accepts collateral other than landed property. They also know about the difficulty in obtaining C of O’s and actively embark on advocacy to the states affected.

5. The Bank of Industry can help you source your working capital requirements through its partners

The Bank does not provide working capital finance but has a network of participating banks with whom it has negotiated SME friendly financing terms. On application to the Boi for equipment finance any interested prospective borrower can also apply to the Bank to be connected to one of the participating banks. The two loans (equipment finance and working capital finance) can run concurrently although the terms will of course differ.

6. The Bank of Industry can lend to start up businesses at its discretion

Whereas the Bank of industry in its general risk acceptance criteria requires a prospective borrower to have been in business for at least three years with a good track record of sales and profit margin, it can also lend to start-ups on a case by case basis. A start up wanting to apply for a Boi loan would need to provide proof of cognate experience in its business area. They would need to have a highly experienced and qualified management and operational team with a verifiable pedigree and sound management structure.

READ ALSO  How To Check Diamond Bank Account Balance Via USSD Code 2018

7. The Bank of Industry does not re-finance plant and equipment

Some prospective borrowers may have financed plant and equipment from other sources using more expensive funds or in some cases short-term funds and may be looking for re-financing. The Boi does not re-finance loans even if they are for plant and equipment.

8. It takes between two and four weeks to receive loan approval

From submission of a complete loan application package to approval can take as little as two weeks, and not longer than four weeks. The bulk of the time in applying for a loan is actually spent in writing the business plan and meeting the requirements.

9. The bank of industry is desirous of providing you with business support

The Bank is not just concerned with providing finance to you. They are very much interested in your success as a business. Their concern starts from wanting you to have the very best chances of having your lbankoan request granted, and extends to ensuring that you generate enough sales and profits to meet your business objectives as well as repay your loan. In order to assist all prospective loan applicants the Bank of Industry has appointed Business Development Support Providers to assist you every step of the way.

These are the main functions of Bank of Industry Nigeria ,if you have more to add to this, please feel free to do it through the comment box below.



The Author


Leave a Reply

Your email address will not be published. Required fields are marked *

© 2018.