How to get Bank of Industry loan in Nigeria

Would you love to learn how to get a Bank of Industry Loan in Nigeria? In this article, I will show you how to do that in easy steps.

If loans were that easy to get, we would all get one, especially as we deal with the fallouts of COVID 19. However, in this article, we will talk about easy steps to get the Bank of Industry Loan in Nigeria without breaking a sweat.

The Bank of Industry, also known as BOI, is one of Nigeria’s biggest financing institutions. They have helped finance numerous projects in the country leading to sufficient growth. Their loans are mainly targeted to the Agricultural, Solid Minerals, Oil and Gas, and Information Technology Sectors.

Bank of Industry Loans Origin

BOI began in Nigeria as the Nigerian Industrial Development Bank (NIDB) Limited in 1964. The name BOI came into existence in 2001, after the restructuring of the finance company.

At the time, it was a deliberate act to place the Bank in a better position to provide efficient yet profitable funding. That same year, recapitalization was achieved, amounting to over N250 billion. The BOI headquarters was also opened in Lagos.

By 2016, the Bank has successfully funded thousands of projects and also launched a successful N10 billion Youths Entrepreneurship Support (YES) to help startup businesses.

Despite its successes, many Nigerians still struggle to gain loans from the Bank for numerous reasons. So In this article, we will straighten out whatever you know about getting loans from BOI.

What You Cannot Expect From BOI

1. The Bank of Industry does not provide funding outside equipment. If you are seeking loans for land and building, then they are not an option.
2. You cannot receive cash from BOI. Only your suppliers and vendors will directly receive the loan you requested.
3. The Bank of Industry supports only businesses in the processing and manufacturing scene across all sectors.
4. The BOI loan is only given to businesses or companies and not a group of persons or individuals
5. Businesses or companies must be register as a Limited Liability Company or possess an officially registered business name before application.
6. Not all startups are welcome, especially those opened by individuals with questionable past. You must provide proof that you have experience for many years in the said business area and have a qualified team in place.

Who can apply for the Bank of Industry Loan?

• Small, Medium or Large-Scale Businesses
• New and Existing Businesses
• Borrowers must have a reputable credit history without discrepancies in payments for previous loans
• Borrowers cannot access loans from the Bank of Industry if they have outstanding loans from other banks or financial institutions.

Loan applications accepted by BOI

The following are businesses that may request loans from the BOI with increased chances of approval.  Bear in mind, finances will only be used for getting the equipment for production and nothing else. You can also access working capital from BOI’s SME partners.

1. Adire (Tie and Dye)/Aso Oke

2. Animal Feeds

3. Aquaculture

4. Bakery

5. Blocks and Interlocking Stones

6. Bottled Water

7. Ceramics & Tiles

8. Chemicals and Paints

9. Cosmetics/Hair Products

10. Dairy

11. Digital Printing/Multimedia Publishing

12. Doors and Window Frames

13. E-Commerce/Information & Communications Technology (ICT)

14. Fashion/Garmenting

15. Fish Smoking/Drying

16. Food Processing (comprising processing of agricultural products)

17. Foundries/Metal Fabrication/3-D Printing

18. Fruit Juice

19. Furniture/Wood Processing

20. Gemstones

21. Greenhouses

22. Laundry and Dry Cleaning

23. Leather/Footwear

24. Liquefied Petroleum Gas/Compressed Natural Gas

25. Meat Processing

26. Mechatronics

27. Health Care (Medical Diagnostics)

28. Laboratory/Orthodontist/Ophthalmology/Physiotherapy)

29. Movie Production (Nollywood)

30. Plastics

31. Quick Service Restaurants

32. Quarries

33. Recycling

34. Roofing Sheets

35. Soaps and Detergents

36. Solar (off-grid)

37. Technical/Vocational Schools (Offering City & Guild Certificate)

38. Theme Parks

39. Water Transportation Riverine

40. Light Manufacturing (Paper, Roofing Sheets, lube blending, Paints, etc.)

41. Grocery packaging

Requirements for Collateral

Before applying, make sure you have the right kind of collateral needed by the BOI. Unlike many other financial institutions, they only provide secured loans, which are loans that can only be accessed with collateral alongside guarantors. The Bank of Industry accepts the following collateral at 150 percent of the intended loan:

• Mortgage on a landed property (duly registered with Certificate of Occupancy)
• Debenture on assets within your company (physical assets are not accepted)
• Bank Guarantee
• External Guarantors with Notarized Statement of Net worth for loans below N10 million

BOI Business Loans Eligibility Criteria

• Collateral must be about 150 percent over the loan amount
• A formal letter of application
• Certified true copies of forms C02 and C07
• 4 copies Feasibility Study Report
• At least 2 or 3 quotations of items of equipment from different suppliers and vendors
• Photocopy of the Certificate of Registration or Incorporation
• Copy of completed Bank of Industry Questionnaire
• Declaration of total Outstanding Liabilities of the Company
• Acceptable Securities, including charge/security interests on borrowers’ copyrights, assets, rights, and equipment/assets financed and/or the under-listed securities, among others.
• Joint and Several Guarantees of the Directors of the Applicant Company with Notarized Statement of Net worth
• Registered Intellectual Property/Proprietary Assets. Assignments of all agreements and Intellectual Property Rights (IPRs) to BOI
• Marketable financial instruments
• Insurance Cover for reputable/acceptable insurance company for short-term lending for not more than one year
• Assignment of Receivables/Lien on deposits/proceeds and the right of set-off
• Ordinary producers would be required to bring in at least 25 percent of the project cost as the promoter’s contribution.
• First hypothecation charge on all tangible moveable assets under the project.
• Producers should bring in at least 25 percent of the cost of the project as the contribution of promoters
• Producers tie up the advances from Distributor to cover 35 – 40% of the budget
• A Trust and Retention Account (TRA) maintained for all capital as revenue outflows and inflows.

Additional Eligibility Criteria for Existing Business

• Three years of recent Audited accounts of the company (when looking for a loan for an existing company)
• Statement of Account for the last six months
• Organizational Management and Structure of the Company ( including startups).

To learn more about the BOI Loans requirement, click here.

How to Apply for Bank of Industry Loan

• Go to BOI website
• Scroll down to provide information about your business registration details
• If YES, then proceed to fill for and select ‘Register.’

Alternatively:

• Visit any of their Bank branches in your area
• Collect the BOI forms from the branch
• Complete the BOI Questionnaire
• Submit the forms

Concluding Thoughts

The Bank of Industry gives loans to businesses with good standing. Therefore, even if you are a startup, you must have employees in place and records of experience showing how capable you are in that field. Nevertheless, these loans can only be used for equipment or working capital and nothing else.

You must have realized that we’ve concentrated wholly on the requirements. The truth is that BOI can process your loans in a very short time as long as you need all the requirements. There processes are very fast. If you don’t, there’s no need applying or it might be a waste of your precious time.

What do you think about the Bank of Industry? Are there changes you would like to see in this reputable financial institution? Please share it with us in the comment section.