Bank of Industry: A Key Player in Nigeria's Economic Growth

The Bank of Industry is a key player in Nigeria's economic growth, providing financial support to small and medium-sized enterprises. It was established in 1972.

The bank's primary objective is to provide financial assistance to industries that are critical to the country's economic growth. This includes manufacturing, agro-processing, and services sectors.

One of its key initiatives is the provision of loans to small and medium-sized enterprises, which has helped to create jobs and stimulate economic growth. The bank has disbursed billions of naira in loans to these enterprises.

The Bank of Industry has also played a crucial role in promoting industrial development in Nigeria, by providing financial assistance to industries that are critical to the country's economic growth.

For more insights, see: Who Owns Key Bank

The Bank of Industry has a rich history that dates back to 1959 when it was first established as the Investment Corporation of Nigeria (ICON) Limited. It was initially focused on investment and development.

In 1964, ICON Limited underwent a significant transformation, becoming the Nigerian Industrial Development Bank (NIDB) Limited, with the World Bank providing guidance. This marked a significant shift in the bank's focus, with an emphasis on industrial development.

The bank's equity structure changed in 1976 due to the indigenization decree, which diluted International Finance Corporation's (IFC) 75% stake in NIDB. This move aimed to increase local ownership and control.

In 2001, the bank underwent a major reconstruction, merging with the Nigerian Bank for Commerce and Industry (NBCI) and the National Economic Reconstruction Fund (NERFUND) to form the Bank of Industry. This new entity had an initial share capital of ₦50 billion.

The bank's share capital was increased to ₦250 billion in 2007, marking a significant milestone in its growth and development.

You might like: What Are Pci Dss Standards

The Bank of Industry (BOI) plays a significant role in administering various intervention funds. BOI has been instrumental in managing the ₦300 billion Power and Aviation Intervention Fund and ₦50 billion Cotton, Textile and Garments Intervention Fund from the CBN.

BOI also manages the Nigerian Content Intervention fund (NCI Fund) worth $200 million. This fund is aimed at promoting local content in the Nigerian economy.

The BOI is responsible for disbursing the Government Enterprise and Empowerment Program (GEEP), a ₦140 billion fund that provides loans at zero percent interest rate to individuals in the informal sector. This program is made up of three microcredit schemes: TraderMoni, MarketMoni, and FarmerMoni.

Through GEEP, BOI supports trade cooperatives, women cooperatives, micro-enterprises, and trade associations with loans ranging from ₦10,000 to ₦50,000. This has been instrumental in promoting financial inclusion in Nigeria.

BOI has also partnered with several state governments under a matching fund scheme to expand financing opportunities for micro, small, and medium-scale businesses. This partnership is based on a 50:50 counterpart funding scheme, where the state governments provide matching funds to support the establishment of these businesses.

Bank of Industry has made significant collaborations and partnerships that have greatly impacted its operations and the Nigerian economy. The bank has partnered with the Federal Ministry of Mines and Steel Development to establish a ₦2.5 billion fund to support artisanal and small-scale miners.

This fund, known as the Nigerian Artisanal and Small-Scale Miners (ASM) Finance Support Fund, provides up to ₦10 million to artisanal miners and up to ₦100 million to small-scale miners. The goal is to promote the development of solid minerals in Nigeria.

The bank has also collaborated with the African Development Bank (AfDB) Group to provide funding for local SMEs in Nigeria. In 2011, the AfDB Group approved a $500 million multi-tranche line of credit for BOI to finance local SMEs.

The Federal Ministry of Mines and Steel Development has collaborated with BOI to support artisanal and small-scale miners in Nigeria.

In 2017, the FMMSD set up a ₦2.5 billion Nigerian Artisanal and Small-Scale Miners (ASM) Finance Support Fund.

BOI was designated as the sole fund manager of the ASM Fund.

Through this scheme, artisanal miners can access up to ₦10 million, while small-scale miners can access up to ₦100 million.

This collaboration aims to address the funding requirements of artisanal and small-scale miners while promoting the development of solid minerals potentials in Nigeria.

The African Development Bank (AfDB) Group has been a key partner for BOI in financing local SMEs in Nigeria. They approved a $500 million multi-tranche line of credit in 2011.

This line of credit has been utilized in two tranches of $50 million each in 2015 and 2017 to fund export-oriented SMEs. These SMEs have the capacity to generate foreign exchange.

The primary goal of this line of credit is to support projects aimed at systematic poverty reduction, employment generation, and wealth creation. This is through entrepreneurial, social, and economic development.

As part of the agreement, AfDB required BOI to provide technical assistance for capacity building. This is for both BOI and SMEs, which has been done in partnership with international companies like BDO/GBRW.

Recommended read: Credit One Bank

BOI-ITC is a subsidiary of BOI established in 1978. It was set up to function as a trustee, registrar, and fund/portfolio manager.

BOI-ITC is also registered with the CBN as a finance company. This registration allows it to offer a range of financial services.

As a Trustee, BOI-ITC provides specialized trust services including private and public trusts. It also manages employment retirement benefits and trust funds for both private and corporate bodies.

BOI-ITC's services include estate administration under trust and executorships. These services are designed to provide support and guidance to individuals and organizations.

BOI-ITC was established as a wholly owned subsidiary of BOI's predecessor, Nigerian Industrial Development Bank (NIDB). This background gives it a strong foundation in finance and trust services.

The Bank of Industry has a corporate structure that is designed to facilitate its operations and achieve its goals. The bank is a government-owned enterprise, which means it is owned and controlled by the government of Nigeria.

At the top of the corporate structure is the Board of Directors, which is responsible for setting the overall direction and strategy of the bank. The Board is composed of experienced professionals who bring their expertise and knowledge to the table.

The bank is led by a Managing Director, who is responsible for the day-to-day operations and implementation of the bank's strategy. The Managing Director is supported by a team of senior executives who oversee various departments and functions within the bank.

A company's branches and subsidiaries are essentially smaller versions of itself, operating in different locations or with a specific focus.

A branch is a smaller part of a company that operates under the same name and management as the parent company.

A subsidiary, on the other hand, is a company that is owned and controlled by another company.

Subsidiaries can be used to expand a company's operations into new markets or to acquire new technologies.

A company can have multiple subsidiaries, each with its own management team and operations.

For example, a company with a subsidiary in a different country might use the subsidiary to adapt its products to local tastes and preferences.

Here's an interesting read: New Bank of Baroda

The Bank of Industry has had its fair share of leaders, with Dr. Olasupo Olusi currently holding the position of Managing Director/CEO since his appointment by President Bola Tinubu in October, 2023.

The bank's leadership has undergone significant changes over the years, with Olukayode Pitan serving as Managing Director/CEO from May 2017 to October 2023, a tenure of approximately six years.

A different take: Heartland Bank Ceo

Waheed A. Olagunju has held the position of Acting Managing Director/CEO on two separate occasions, first from April 2014 to May 2014, and again from February 2016 to May 2017.

Rasheed Adejare Olaoluwa served as Managing Director/CEO from May 2014 to February 2016, a period of about two years.

Here's a list of past Managing Director/CEOs of the Bank of Industry in descending order:

Evelyn Oputu served as Managing Director/CEO from December 2005 to April 2014, a tenure of about nine years.

The Bank of Industry's financial performance is a testament to its resilience and adaptability in the face of adversity. Despite the challenges posed by the COVID-19 pandemic, the bank's assets hit a record high of N1.86 trillion in 2020.

This represents a significant increase of 79.1 per cent from the previous year's total of N1.04 trillion. The bank's chairman attributed this achievement to the bank's successful debt syndications, which included €1 billion and $1 billion concluded in March and December 2020, respectively.

The bank's total equity also saw a notable increase, rising by 15.3 per cent to N336.48 billion in 2020. Loans and Advances, however, grew marginally by 1.3 per cent to N749.84 billion, reflecting the challenging operating environment.

Profit Before Tax fell by 9.6 per cent to N35.54 billion, due to the slowdown in economic activities and various interventions initiated by the bank for its customers.

The Bank of Industry has a strong foundation of leadership and initiatives that have enabled it to achieve its goals. The bank has a robust governance structure that ensures effective oversight and decision-making.

The bank's leadership has been instrumental in driving its growth and development, with a focus on innovation and risk-taking. This is evident in the bank's commitment to providing financing for small and medium-sized enterprises (SMEs), which has helped to stimulate economic growth and job creation.

The bank's initiatives have also been designed to promote economic development and social welfare, with a focus on supporting marginalized communities and promoting entrepreneurship.

Olusi's leadership style was characterized by his ability to inspire trust and confidence in his team. He was a natural communicator who could distill complex ideas into simple, actionable plans.

With a background in project management, Olusi brought a practical approach to his role, focusing on tangible results and measurable outcomes. His experience in managing large-scale projects helped him navigate complex organizational challenges.

Olusi's leadership was also marked by his willingness to listen and learn from others, creating a collaborative and inclusive team culture. He believed in empowering his team members to take ownership of their work and make decisions that aligned with the organization's goals.

Under Olusi's leadership, the organization saw significant improvements in productivity and efficiency, with a notable reduction in project timelines and costs. His leadership style was instrumental in driving these results.

Presidential Grants and Loans are a vital part of the government's initiatives to support small businesses and entrepreneurs. Many grants are available, such as the Small Business Administration's (SBA) Microloan Program, which provides up to $50,000 in funding.

The SBA also offers the Patriot Express Loan Program, which provides expedited processing and decision-making for small businesses owned by veterans. This program is designed to support the economic growth of veteran-owned businesses.

The government has also established the State Trade Expansion Program (STEP), which provides grants to small businesses to help them expand into new markets. These grants can be used for a variety of purposes, including export training and marketing.

Grants are not the only option for small business owners; the government also offers loans with favorable terms. The SBA's 7(a) loan program is one such option, offering up to $5 million in funding with a low interest rate of 6.5% or less.