BOI, 10 SME FRIENDLY COMMERCIAL BANKS SEAL PACT ON FINANCING FRAMEWORKS FOR SMES

BOI, 10 SME FRIENDLY COMMERCIAL BANKS SEAL PACT ON FINANCING FRAMEWORKS FOR SMES

BOI  BANKS 1 (5)

MANAGING DIRECTOR/CEO BANK OF INDUSTRY(BOI) RASHEED OLAOLUWA (MIDDLE) FLANK BY TOP 10 EXECUTIVES OF OF SME FRIENDLY BANKS AFTER SIGNING OF MOU BETWEEN THE BANKS AND BOI AT BOI HEAD OFFICE LAGOS

BOI   BANKS  3

L-R EXECUTIVE DIRECTOR, FCMB OLUFEMI BAKRE, MANAGING DIRECTOR/CEO BANK OF INDUSTRY RASHEED OLAOLUWA, EXECUTIVE DIRECTOR, ACCESS BANK TITI OSUNTOKI AND EXECUTIVE DIRECTOR FIDELITY BANK IK MBAGWU AFTER SIGNING OF MOU BETWEEN BANK OF INDUSTRY AND 10 SME FRIENDLY BANKS IN LAGOS

BOI, 10 SME FRIENDLY COMMERCIAL BANKS SEAL PACT ON FINANCING FRAMEWORKS FOR SMEs

IN a bid to address financing challenges confronting small and medium enterprises in the country, the Bank of Industry (BoI) has signed a memorandum of understanding with 10 deposit money banks on new frameworks to support the SME sector.

The commercial banks include Access Bank Plc, Diamond Bank Plc, Ecobank Limited, Fidelity Bank Plc, First Bank Limited, First City Monument Bank Limited, Skye Bank Plc, Stanbic IBTC Bank Plc, Standard Chartered Bank Limited, and United Bank for Africa Plc.

Under the new framework, prospective customers of the Bank of Industry would access the bank’s funds based on its risk acceptance criteria, while the commercial banks would provide working capital to the SMEs based on agreed terms under the framework and the banks’ individual risk acceptance criteria.

Speaking during the signing of the agreement, the Managing Director of BoI, Rasheed Olaoluwa, explained that the bank, having understood the financial challenges encountered by small businesses decided to deploy a multi-pronged approach to address the problem of poor loan packaging and access to finance through the earlier appointment of 122 Business Development Service Providers (BDSPs) and present partnership with 10 commercial banks.

According to him, the pact, which would be due for renewal after the expiration of the initial three years period, will see BoI providing financial intervention for sectors like agro-processing, solid minerals and metals, light manufacturing, logistics, and other critical sectors identified under the Nigeria Industrial Revolution Plan.

Indeed, the pact would see the BoI providing loans to beneficiaries at an interest rate of 9-10% per annum and a tenor of at least five years as well as moratorium period of 12 months.

On part of the commercial banks, working capital facilities would be provided at an interest rate of 19 per cent, representing a combination of the current Monetary Policy Rate and six per cent interest from commercial banks with a tenor of at least 12 months.

He noted that BoI decided to leverage the banks’ branch network to further reach its customers as well as increase its intervention across spheres of small businesses.

Mr. Rasheed Olaoluwa explained that the synergy between BoI and the SME-Friendly Banks, which is unprecedented between a Development Finance Institution and commercial banks, will undoubtedly foster greater access to finance for SMEs, financial inclusion for Nigerians and also engender wealth creation and accelerated job creation for Nigerians.

Leave a Reply

Your email address will not be published. Required fields are marked *


*


Share This