|  By Tajudeen Kareem  |

ACROSS the globe, small and medium enterprises are the lifeline of any serious country willing to cut ties with poverty and unemployment. In realizing this, Nigeria’s foremost development financial institution – the Bank of Industry- is unrelenting in stimulating SMEs, not least at the time the government is trying all it could to retool the economy through its diversification policies.

In fulfillment of its mandate, the bank is grooming more entrepreneurs, growing businesses and stimulating job creation by using the templates of its business support programmes to reach out to its beneficiaries across the country.

Records of its performance in 2016 indicate remarkable value addition to businesses during the recession; that year, the Bank of Industry posted an operating profit before tax of N17 billion, representing 44 percent increase over N11.9bn recorded in the previous financial year.

Bank loans and advances also increased by 10 per cent to N171bn in 2016 from N156bn in 2015, while disbursements to SMEs rose to 42 per cent within the same period to N8bn against N5.64bn in 2015.

Also, the BOI’s non-performing loans dropped to 3.72 percent in 2016 from 5.87 percent, same period when bad loans in the banking sector shot up to 14 percent above the Central Bank of Nigeria’s five percent benchmark.

The bank’s acting Managing Director, Mr. Waheed Olagunju ascribed the performance to strong commitment, professionalism and strict adherence to global best practices by the management team and staff. This achievement was possible based on BOI’s consistent high ratings by international and domestic rating agencies. Indeed, Moody’s assigned BoI Aa1 in 2016 up from Ba3 of 2015. Agusto’s rating of AA- in 2016 was higher than A+ of 2015. AA+ assigned by Fitch in 2015 was affirmed in 2016.

He also highlighted the confidence reposed in the bank by the Institute of Chartered Accountants of Nigeria, ICAN and other local rating and professional bodies. “We are delighted that the country and the various constituencies we serve continue to appreciate the bank’s contributions to development in Nigeria which is also coming from such a prestigious and reputable professional body as ICAN.

“This will have a very positive effect on us as we are going to be challenged to do more for the development of Nigeria,” he reacted.

BoI is not resting on the success of the previous years to peg the climax of its impact on the target people, sectors and the nation. In view of this, the bank set out a projection to SMEs with N376 billion before the end of 2019. Olagunju disclosed this in Makurdi while presenting a paper on “Target Financing for SMEs’’ at a management retreat for officers of the ministry and its agencies. He said regardless of the increased disbursement to SMEs in 2016, the bank aspires to release N376 billion towards 2019.

Indeed, in pursuing the goal, the bank recently signed a Memorandum of Understanding with Afterschool Graduate Development Centre in a scheme meant to provide between N200,000 to N500,000 to empower one million youths over the next five years.

As a catalyst, the bank had disbursed N5 billion to micro-finance banks for financing micro-loans to small entrepreneurs.“About N4.5 billion has been disbursed to micro-finance banks and over 15,000 microenterprises have benefitted from this scheme,’’ Olagunju disclosed.

This year, BoI has continued to up its game, meeting the needs of existing and prospective entrepreneurs; among which are serving youth corps members. The bank intends to equip the young graduates to become employers of labour against the trend of adding to the   large army of job-seeking young people roaming the streets.

Same way, the bank has revised its interest rates on loans to members of the National Youth Service Corp from nine to zero per cent under its Graduate Entrepreneurship Fund (GEF) programme. The move is aimed at encouraging the youth to embrace entrepreneurship and become employers of labour.

The scheme, an initiative of the BoI in collaboration with the NYSC Directorate, is currently in the second edition and over N262.9 million disbursements have already been made to 177 successful candidates. The free interest loans became effective from this May, with new beneficiaries paying back only the principal, while the existing 177 candidates will be required to pay loan interest that accrued up to 30th April, 2017.

A breakdown of BoI’s activities for 2017 indicates that as at 30th April, 2017, BoI had exceeded 2016’s disbursement of N8 billion to MSME’s. Already, more than N13 billion has been disbursed to this segment of entrepreneurs, representing 62 % increase from last year.

As the bank embarks on multi-sectoral support to revitalise the economy, it is riding on the wings of its development-stimulating mandate in the arts, healthcare, solid minerals, power, agriculture and other areas to position itself as a capable and trusted platform through which states and local governments can partner to boost economic growth for small and medium enterprises.

Recently, further to its development collaborations with states, the BoI and the Borno State government raised a N2 billion matching fund to develop micro, small and medium enterprises in the state. Olagunju disclosed that the counterpart funding plan would see the state and BoI providing N1 billion each to empower youths in the state through job creation and inculcating entrepreneurship development.

“It is in pursuit of the bank’s policy on inclusive development and the desire to bring its products and services closer to the grass-root that necessitated the bank’s resolve to push for a partnership with the state government to as to sustain our continued effort to serve Borno State better and vastly improve on the turnaround time for processing transactions,” Olagunju emphasized.

Earlier in the year, the BoI, in partnership with Diamond Bank sealed a deal to help micro entrepreneurs access the N140 billion Government Enterprise and Empowerment Programme, (GEEP) Funds were Diamond Bank would provide the platform and customer base to disburse the fund to traders, farmers and sundry business owners on a five per cent interest to beneficiaries nationwide.

At the just concluded First Northern Nigeria Solid Minerals Fair and Workshop in Kaduna, the BoI pledged the commitment of the bank to fund the solid minerals sector.

“In view of the importance of the Solid Minerals sector in the diversification actualization in the Nigerian economy,   the Bank of Industry remains committed to assisting genuine investors in providing funding required for setting up of mining companies”, he said.

To meet its obligations and aspirations, BoI intends to raise a N1 trillion loan facility locally and abroad to part-finance the industrial component of the Federal Government’s Economic Recovery and Growth Plan.

Olagunju said that in order to support the ERGP and support enterprises that would hasten the realization of the global benchmark contained in the Sustainable Development Goals, the bank had started talks with some development banks as well as foreign and national multilateral development finance institutions towards mobilizing funds to achieve this mandate.

At the 57th Annual General Meeting of the bank in Abuja, Olagunju outlined strategies to shore up the bank’s risk assets by 2019 to N1.2 trillion in line with its revalidated strategic plan (2016-2019). The recapitalization drive by the bank became necessary in achieving its developmental agenda and in ensuring that MSMEs account for at least 30 % of the bank’s projected risk assets of N1.2 trillion by 2019.

Through this plan, no fewer than five million jobs would be created through businesses being financed under various schemes.

It is pertinent to state that effective collaboration between the Bank of Industry and various governments and institutions is imperative to mitigate the pangs of unemployment and poverty on the Nigerian people sooner than expected.

*Kareem is a public policy analyst

—  Jun 5, 2017 @ 01:00 GMT