Lack of finances is a significant reason why businesses don’t succeed. A study carried out in 2022 showed that 47% of businesses failed because they couldn’t get the money required to stay alive while 44% simply ran out of cash to carry out their operations.
The Bank of Industry in Nigeria is one of many organizations that provide a lifeline to aspiring entrepreneurs through its low-interest loan programs. In this article, we will explain the different types of loans the Bank of Industry offers, the documents you need to apply for a Bank of Industry loan, and how you can get started.
The Bank of Industry (BOI) is a development finance institution in Nigeria that has been promoting economic growth and industrial development in Nigeria since 1959.
It officially became the Bank of Industry in 2001, merging three organisations: the Nigerian Industrial Development Bank (NIDB), the Nigerian Bank for Commerce and Industry (NBCI), and the National Economic Reconstruction Fund (NERFUND).
The BOI is mainly owned by the Nigerian Ministry of Finance (94.80%), with a small share held by the Central Bank of Nigeria (5.19%) and private shareholders (0.01%). It has 30 offices across the country and has collaborated with various organisations, federal ministries, state governments, the African Development Bank, and the United Nations Development Programme to provide loans to MSMEs in Nigeria.
Since its inception, the BOI has given out ₦312.5 billion in loans, helped over 4.2 million businesses, and created 9,050,796 jobs.
The primary goal of the Bank of Industry is to help Nigeria’s economy achieve sustainable growth by:
One of the ways BOI intends to reach this goal is by offering financial help and expert advice to small and medium-sized businesses in Nigeria.
BOI provides loans to companies in various fields, but its main focus is on businesses in the Agro and Food Processing, Creative Industries, Engineering and Technology, Healthcare, and Petrochemical sectors.
The Bank of Industry provides loans to MSMEs through its directorates and partnerships with financial institutions and government agencies. BOIs loans are divided into four main categories:
Bank of Industry’s micro business loans are for small businesses operating in formal, semi-formal, and informal sectors. They are available to market women, traders, artisans, fintechs, farmers, agriculture workers, and young entrepreneurs.
BOI offers three types of micro business loans: MSME Distributor Finance, Smallholder Farmer Cluster, and Fintech Digital Lending.
The MSME Distributor Finance loan helps micro-businesses access loans to buy and sell made-in-Nigeria products from intermediary companies. With the MSME distributor finance loan, you can:
The Smallholder Farmer Cluster loan is to help farmers produce enough high-quality agricultural produce for Nigerian manufacturers. With the smallholder farmer cluster loan:
Fintech Digital Lending loans are for fintech companies that have been operating for at least two years. With this loan, fintech companies can:
Only fintech companies regulated by the Central Bank of Nigeria are eligible for this loan.
Bank of Industry’s SME loans are for registered small and medium businesses operating in various sectors such as fashion and beauty, food and agro commodity processing, light manufacturing, engineering, healthcare, etc. BOIs
SME loans range from ten million Naira to one billion Naira and come with longer repayment periods of three to five years. Another great thing about BOIs SME loan is that they are offered at below-market rates and businesses can postpone the repayment period by three to twelve months.
The SME loan products offered by the Bank of Industry are:
Bank of Industry’s large enterprise loans are for registered big businesses in different sectors like agro and food processing, creative Industries, engineering and technology, healthcare, etc. BOIs large enterprise loans start from one billion Naira.
Bank of Industry’s creative industry loans are for businesses in the creative and entertainment sectors in Nigeria. In 2021, BOI disbursed 32.8 Billion Naira in loans to businesses such as music production, movies, cinemas, hotels, etc. BOI offers two types of creative industry loans: the BOI fashion fund and the CBN textile revival implementation fund.
The BOI fashion fund is for Nigerian businesses in the fashion industry. With the loan, businesses operating in the fashion industry can:
To qualify for the loan, your business must:
The CBN Textile Intervention Fund was created by CBN in collaboration with the Federal government and some state governments to restructure and provide additional loans to the clothing, textile and garment subsector in Nigeria. With this loan, businesses can:
To get a loan from the Bank of Industry (BOI), you must first have an account with them.
Don’t worry; although the requirements depend on the size and type of your business, the process is pretty straightforward. Here’s what you’ll need:
After opening a BOI account, you can apply for any of its loans via the Bank of Industry loan portal or by visiting any of its offices in your state. BOI loan application process are in two stages: the loan application stage and the loan disbursement stage.
For the loan application stage, you’ll need to provide (where applicable):
If your loan gets approved, it moves to the loan disbursement stage. Before the money lands in your account, you’ll need to provide:
BOI loans are available to a variety of businesses, however, BOI prioritizes businesses in the following sectors:
Your chances of getting a loan are even higher if your business is registered and if it contributes positively to Nigeria’s growth like:
To be certain your business qualifies for a Bank of Industry loan, you can visit a BOI branch or check the BOI;s website to review the documents and collateral required for the loan you want to apply for.
The Bank of Industry is an excellent option to consider when applying for loans because it offers favourable terms and a flexible repayment period.
Although meeting their loan requirements may be tough, their loans are customised to fit the size and sector of your business, providing you with the freedom to choose the best option for your company.
