The Bank of Industry (BoI) and the Sokoto State Government have signed an agreement to float a N2 billion-matching fund for onward lending to small enterprises in the state.
The acting Managing Director, BoI, Mr. Waheed Olagunju, said under the partnership, both parties would be required to provide N1 billion each for lending to entrepreneurs.
The financing deal, which was sealed on Wednesday night came as the bank earlier commissioned its Sokoto office.
Speaking during the signing of the memorandum of understanding (MoU) between both parties, Olagunju said the financing model of fund-matching had become necessary against the backdrop that the bank could not solely finance industries in the country without collaboration with the states which are the custodians of lands.
Already, the bank currently had a subsisting matching funds deal with 18 state governments across the country.
He, further revealed that the bank had so far disbursed N1.6 billion to 25 industrialists in the state.
He added that as part of the strategies to deepen it credit delivery process in the state, the bank had commenced product programmes that were targeted towards funding projects in the 40 identified products.
He said: “We look at our mandate of transforming Nigeria’s industrial landscape and we realise that we cannot do it alone. Finance is just one of the factors of production. There are other things that needed to come into the fore before we can support entrepreneurs across the country.
“Entrepreneurs are located in the states. They must have a piece of l
and before they can do business. And under the Land Use Act, land is vested in the governors. That makes partnership with the state governments an indisputable part of our business.”
Olagunju said the bank had identified seven clusters which would be accorded priority financial support in the state.
These, according to him are groundnut oil, animal feeds, leather products, rice processing, food processing, quarries and meat processing.
He added that the bank would give funding priority to the state’s leather industry where it has competitive advantage.
On the need to establish an office in the state, he said: “With BoI’s presence in the historic city of Sokoto, we believe the developmental impact of the bank will be greatly enhanced in support of the real sector and also complement the state government ‘s socio-economic development objectives.”
However, reacting to the bank’s interventions in the state, the Executive Governor of Sokoto State, Aminu Tambuwal expressed delight at the establishment of the bank’s office in his state, noting that the proximity to customers would boost business activities in the state.
He renewed the state’s commitment to abide by the terms of the matching fund deal and promised to provide the state’s counterpart funding of N1 billion on time to enable entrepreneurs in the state enjoy the facility.
He, further allayed fears over non-payment of loans, stressing that only trusted, committed and visionary entrepreneurs in the state would be recommended to the bank for business.
According to him, “This is the time we have been longing for. It is good for our people, especially the entrepreneurs. Our entrepreneurs here are very enthusiastic and committed. They only lack two things: organisation and funding.
“However, the government is ready to organise them and we are happy you are here to give us support to fund them. Rest assured in the next two years, this effort will have yielded positive result. As a government we are ready to give our people all the required supports. We can only recommend those we trust will utilise the fund that are going to be made available them judiciously. We are committed to the terms of the agreement of the MoU.”