I have been wondering for a while if small businesses actually get loan from Bank of industry because personally I have never come across anyone successfully getting loan from them. Even when I participated in a federal government backed empowerment program, the BoI YES-P I was still unable to get anything.
So I want to ask if anyone has succeeded, if yes tell us the process so we can keep trying, I really need small loan to support my business.
For a start, it should be noted that BoI’s loan facilities have been targeted at businesses that engage in manufacturing and processing activities. But in the broadest and most recent spread of its engagements in this area has included businesses in other areas such as entertainment and essential services sectors including education, healthcare and hospitality.
Key target sub-sectors include Agro-processing, Solid Minerals, Information Technology as well as Oil and Gas. The list of SME product clusters that BOI supports contains the following:
Adire (Tie and Dye)/Aso Oke, Animal Feeds, Aquaculture, Bakery, Blocks and Interlocking Stones, Bottled Water, Ceramics & Tiles, Chemicals and Paints, Cosmetics/Hair Products, Dairy, Digital Printing/Multimedia Publishing, Doors and Window Frames, E-Commerce/Information & Communications Technology (ICT), Fashion/Garmenting.
Others are: Fish Smoking/Drying, Food Processing (comprising processing of agricultural products), Foundries/Metal Fabrication/3-D Printing, Fruit Juice, Furniture/Wood Processing, Gemstones, Greenhouses, Laundry and Dry Cleaning, Leather/Footwear, Liquefied Petroleum Gas/Compressed Natural Gas, Meat Processing, Mechatronics, Health Care (Medical Diagnostics), Laboratory/Orthodontist/Ophthalmology/Physiotherapy), Movie Production (Nollywood), Plastics, Quick Service Restaurants, Quarries, Recycling, Roofing Sheets.
The Bank also supports businesses in Soaps and Detergents, Solar (off grid), Technical/Vocational Schools (Offering City & Guild Certificate), Theme Parks, Water Transportation Riverine, Light Manufacturing (Paper, Roofing Sheets, lube blending, Paints etc), and Grocery packaging.
In total about 41 lines of businesses are listed. However, if your product is not listed here and you think it should, BoI creates a window whereby you can still be accepted when you provide them with information on your product for review by its technical team.
In the next edition we look at other basic thing you should know before approaching BoI for a business loan.
The Bank does not finance land and building which are expected to be financed from equity or owner’s/ promoter’s capital. But BoI also gives working capital loan indirectly. You can access the working capital loan from any of the ten (10) SME friendly banks that BoI partners with.
Interest rate on BoI loans is around 6 percent on top of Central Bank of Nigeria’s Monetary Policy Rate, MPR. This means that since current MPR is 14 percent, the interest rate on the BoI loans would be 20 percent.
Note also that when BoI approves loan for your business, it does not give you cash or put the money into your account. Instead it pays the supplier of the machine or equipment for which you sought the loan.
On the amount you can borrow BOI’s loan support to SMEs starts from N5 million. However, loan below N5 million are provided on BoI’s matching fund platform which is operated in collaboration with various State Governments and also on the bank’s Bottom of the Pyramid (BoP) scheme which is operated through MicroFinance Banks.
In the next week’s edition we continue this aspect of the discussion with how you can apply under the BoI matching Fund or the BoP scheme.
You can also apply for BOI Loan via online Application Portal
The online loan application portal has been created for the convenience of BOI’s prospective SME customers in the sense that they do not initially have to come physically to the Bank to submit their loan applications. It also has the advantage of shortening the loan processing Turn-Around-Time (TAT) of the Bank. The portal has document uploading capability as well as allows the loan applicant select the preferred BOI State Office location where the application will be processed. The online loan application portal can be accessed on the Bank’s website: http://www.boi.ng/apply.
How to use the Portal:
The following simple steps summarize the loan application process:
- Go to our website: boi.ng.
- Click on the “Apply for loan now”
- Click on “Register here” to register your account.
- A verification link and tracking code are sent to your registered email address; click on the verification link to facilitate log in.
- Once logged in, you can complete the application form, save and click on “continue” to submit the form.
- A mail will be sent to your email address confirming receipt of the application.