BLOCK MOULDING

PURPOSE/ RATIONALE ·         It is an indispensable industry in Nigeria’s economy as far as housing, urban development and Infrastructure development is concerned.

 

·         As a sub-sector of Construction, the industry is a major catalyst of economic growth.

 

·         With predominance of local raw materials, improved living standard and demand for better housing with bespoke finishing in the urban centres; the sub-sector is proving to be a gold mine of sorts in the country and attracting a good number of semi-skilled and professional block moulders.

 

·         This product will provide operators the needed financial assistance to acquire modern equipment for improved output that can compete globally as well as create more jobs.

TARGET MARKET/

CRITERIA

The Target market for the supply of blocks and interlocks is the mass estate developers, major construction sites and private residential/office property developers nationwide. This will also include:

  1. Start – ups and Expansion.
  2. Limited Liability Companies and Enterprises promoted by both Men and Women.
  3. Wholly owned Nigerian Companies.

Foreign/locally-owned companies with minimum of 51% Nigerian Ownership in its shareholding structure

PROJECTED IMPACT A typical small- to medium scale block/interlock making business will create an average of 10 – 20 direct jobs and 50 – 100 indirect jobs, totaling 60 – 120 jobs.

 

Small Medium
Direct 5 -10 20
Indirect 25 – 50 100
Total 30 – 60 120
SINGLE OBLIGOR LIMIT
  • Up to N500 million in accordance with BOI SME lending limits
PRICING

 

Interest Rate: 9 % per annum.

Fees: 1% Processing Fee for loan less than N50 million.

          1% each for Appraisal and Commitment Fees for loan             above N50 million

TENOR
  • 31/2 – 7 years (inclusive of moratorium).
MORATORIUM 6 – 12 months from date of Loan Disbursement.
SECURITY
Loan Amount (N’m) Security Arrangement
  5.0 – 10.0 1.  Specific charge over the equipment financed.

1.   Irrevocable Personal Guarantee of the Chief     Promoter of the company.

2.   Two (2) external guarantors acceptable to BOI who must belong to any of the following categories:

a)     Senior Civil Servant (Level 12 and above) who should not be more than 53 years old or not more than 28 years in service (whichever comes first).

b)     Bankers (not below the level of Assistant Manager) and must have been confirmed by current employer.

c)      Professionals i.e. Medical Doctors, Lawyers, Accountants, Engineers, etc.

d)      Senior Staff (not less than a manager) of reputable quoted Companies, International Oil Companies, Telecommunications Companies (GSM providers)

e)     The guarantees must be supported with Notarized Statement of Net worth acceptable to BOI.

 
  >10.0 ≤ 20.0
  1. All assets debenture.
  2. Irrevocable Personal Guarantee of the Chief Promoter of the company.
  3. One (1) external Guarantor acceptable to BOI who must belong to any of the following categories:

a)     Senior Civil Servant (Level 12 and above) who should not be more than 53 years old or not more than 28 years in service (whichever comes first).

b)     Bankers (not below the level of Assistant Manager) and must have been confirmed by current employer.

c)     Professionals i.e. Medical Doctors, Lawyers, Accountants, Engineers, etc.

d)      Senior Staff (not less than a manager) of reputable quoted Companies, International Oil Companies, Telecommunications Companies (GSM providers)

e)     The guarantees must be supported with a Notarized Statement of Net worth acceptable to BOI.

Or

1.    Bank Guarantee from Commercial Banks acceptable to BOI.

 
  > 20.0
  1. Irrevocable Personal Guarantee of the Chief Promoter of the company in addition to one or a combination of the following:

i.                                  All assets debenture.

ii.                                  Legal mortgage on pledged property.

Or

2.    Bank Guarantee from Commercial Banks acceptable to BOI.

 
FUNDING

STRUCTURE

·         Loan up to N50 million:  90% maximum from BOI (including working capital from BOI or the SME-friendly banks).

·         Contribution by the promoter – 10% (minimum)

·         Loan above N50 million: 80% maximum (including working capital from BOI or the SME-friendly banks).

·         Contribution by the promoter – 20% (minimum)

·         Existing Business:

·         For an existing project, the estimated value of the factory building and/or relevant processing equipment, may be applied against the borrower’s 10 – 20% contribution. The factory building and/or equipment must be valued professionally by any of BOI’s accredited valuers.

DISBURSEMENT Term Loan:

·         In phases in accordance with agreed milestones and shall be backed by provision of performance bond issued by a commercial bank or a BOI accredited insurance company, on behalf of the BOI accredited equipment supplier, where the supplier demands for advance payment before delivery of the equipment).

 

·         Establishment of Letters of Credit where the plant and machinery are to be imported.

Working Capital:

After successful installation and testing of the equipment and payment shall be made directly to raw materials suppliers.

REPAYMENT SOURCE
  • From proceeds of the company’s operation
REPAYMENT MODE
  • Monthly by direct debit of customer’s account domiciled with the participating SME-friendly bank on the basis of a Tripartite Agreement signed between BOI, the SME-friendly Bank and the Customer. Such direct debit collections, must be remitted by the SME-friendly bank to BOI within 24 hours. In the event of default, the SME-friendly bank must notify BOI within 24 hours to trigger prompt remedial action by the Bank.
  • In the alternative, the customer should provide post-dated cheques in line with the amortization schedule.
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