Category: News

The renowned international rating agency, Fitch, has assigned Bank of Industry (BoI) a national long-term rating of AA+(nga) and national short-term rating of F1+(nga) as the national ratings reflect the bank’s creditworthiness relative to the best credits in Nigeria.

Fitch’s rating is coming on the heels of a domestic credit rating of A- secured by the BoI from a leading Nigerian credit rating agency, Agusto & Co, affirming that the financial institution remains in good financial condition and has a strong capacity to repay obligations on a timely basis.

At a long-term Issuer Default Rating (IDR) of BB- as well as a negative outlook and a short-term IDR of B, Fitch has advocated for increased support for the BoI by the federal government in order to improve the bank’s lending capacity and aid the realisation of its objective.

According to Fitch, BoI’s long-term IDR is at its Support Rating Floor (SRF) of BB-, which considers Nigeria’s ability to provide such support in a timely manner as and at when it is required, as indicated by Nigeria’s long-term foreign currency IDR of BB-.

However, Fitch noted, “The ratings could also be downgraded in the event of material change in the government ownership and/or any change in the bank’s policy role. An upgrade of the Nigerian sovereign would not necessarily lead to an upgrade of the BoI’s IDRs. The BoI’s national ratings are sensitive to any change in Fitch’s opinion of the BoI’s creditworthiness relative to the best credits in Nigeria,” Fitch added.

Speaking on the rating, the managing director of the BoI, Rasheed Olaoluwa, said, “The positive rating is an endorsement of our ongoing transformation project at the BoI and an affirmation of our strategic intent of adopting global best practices in all aspects of our operations.

It further affirms an improvement in Agusto’s rating of the development finance institution.”

According to the Managing Director, “We are determined to make increasing impact in our focus sectors and to continue to set the pace as Nigeria’s leading development bank.

Fitch Rates Bank of Industry at ‘BB-‘; Outlook Negative and ‘AA+ (nga) 

Fitch Ratings-London-25 June 2015: Fitch Ratings has assigned Nigeria-based Bank of Industry Limited (BOI) a Long-term Issuer Default Rating (IDR) of ‘BB-‘ with a Negative Outlook and a Short-term IDR of ‘B’. Fitch has also assigned BOI a National Long-term rating of ‘AA+(nga)’ and National Short-term rating of ‘F1+(nga)’.A full list of rating actions is at the end of this rating action commentary.

In Kano city, Rumbu Sacks Nigeria Limited has said it will increase its workforce to 2000 Nigerians with its ongoing expansion project. The woven sacks and mat company owned by former speaker of the house of representative turned entrepreneur, Alhaji Ibrahim Salisu Buhari is a beneficiary of various loans facility from the Bank of Industry (BoI) targeted to stimulate businesses in Kano State. The company which started in year 2000 with 30 staff has grown to become Nigeria’s leading manufacturer and exporter of mats, sacks and allied products within the West Africa coast. Transacting with the bank for about a decade, Buhari’s Rumbu has maintain a perfect records on prompt payments of the loan. Buhari’s company was listed in the BoI Hall of Fame for prompt payment of facilities and massive jobs creation in the state. “It has taken 6 facilities from the Bank since 2005 and successfully repaid while its turnover increased from N130.0 million from 2002 to N1.731 billion in 2013.”  Buhari praised the single digit interest rate given to manufacturers, noting that it is not only convenient, but also easy to repay. He said the company grew from scratch 15 years ago to become the biggest producer of woven sacks and mats in the country “BOI improved our operations to the extent that we have been able to achieve an evolution of our production process from manual to advanced automation. Similarly, our company has been able to increase its workers from 231 in 2001 to 1,163 to date in direct and indirect employees “By the time we finish the ongoing expansion, we will increase our mat machines from 200 to 250 and total strength of 2,000 Nigerians,” he stated. According to him “Rumbu Sacks is the first and the only mat production company in Africa to acquire, install and fully operate the computerised Jacquard weaving machine. With the machines that were acquired with the loan, production is now easier and inch-perfect.” Passionate about engaging young people in the country, Buhari said the company is 100percent operated by Nigerians. “we have had zero direct involvement of any expatriate staff from outside. We are all Nigerians working at Rumbu, if other big entrepreneurs emulate this, unemployment in the country will be reduce drastically.

BOI’S AUTOMOTIVE FUND HITS N18.09B

The Bank of Industry (BoI) National Automotive Council (NAC) Fund has grown to N18.09 billion since inception in 2003. The fund is aimed at developing the automotive sector by financing projects in the industry and the annual budgetary approval for capital and recurrent expenditures of NAC. BOl manages the fund for a fee of five per cent per annum on investible fund, payable quarterly and deductible from the balance of the fund. Similarly, it was learnt that NAC receives management fe e of two per cent per annum on investible fund payable quarterly and deducted from the balance of the fund. For the funding of projects, the fund is broken down into three categories such as, NAC Term loans and Working Capital Financing granted at 7.5 per cent and 10 per cent per annum on term loan and working capital respectively. The second category, NAC Auto Technicians Support Scheme boasts of N1 billion set aside from the main NAC fund for capacity building in repair and maintenance for artisans, craftsmen, technicians and mechanics.

The scheme is provided at 7.5 per cent per annum to the partnering Micro Finance Bank (MfB) and 10 per cent per annum to the final beneficiary. The last one is vehicle purchase credit scheme for individuals and private commercial operators, lease finance for fleet operators to purchase vehicles from local assembly plants in order to enhance their capacity utilisation and those of component manufacturers. BoI also manages funds for state governments such as Anambra, Niger and Kogi states. For Anambra State the fund is geared towards addressing the dearth of funding support to small business owners in the state. Under the scheme, entrepreneurs of Macro, Small and Medium Scale Enterprises (MSME) with production capacities within the state would access to the fund by way of funding equipment supply and requisite working capital.

These entrepreneurs are basically divided into two major categories namely cooperatives and SMEs both with distinct eligibility requirements and loan servicing conditions and terms, the financial commitment of the state to the programme is over a billion naira. For Niger State the government committed over a billion also to support businesses while Kogi state said that under the programme the small business owners with production capacities within the state would have access to the fund by way of equipment supply and requisite working capital.

All the collaborations the bank said is to grow small business who are the engine of growth in the different states and also a vehicle for job creation bearing in mind the millions of youth who roam the street on a daily basis looking for jobs. This intervention by BoI is in addition to a programme recently established to aid SMEs access an online real time request platform to grow their businesses. The bank said it took this path to starve the failure rate of applications and the inconveniences encountered by business owners to come physically to their office to make requests.

BoI Managing Director, Mr. Rasheed Olaoluwa said it will remove the inconveniences suffered by applicants; He said: “We have come up with a loan tracking system in such a way that when you apply for loan we give you a code. We have also appointed 122 Business Development Service Providers (BDSPs) to help the businesses write good proposal that will attract loans from banks.

Our newly introduced SME Customer portal where have value proposals and contact details of all our customers. Currently we have data base for over 400 SMEs. This also makes for easier interaction amongst our customers where they can be encouraged to do businesses together.”

The Bank of Industry, one of Africa’s most active development banks, has continued to impact the Nigerian manufacturing sector positively through efficient single-digit funding. Companies that have so far benefitted from the bank’s loans include Emzor Pharmaceuticals Limited, Nestle Nigeria plc, Peugeot Automotive Nigeria Limited, Innoson Technical & Industrial Company Limited, Eastern Metals Limited, UNTL plc, Honeywell Flour Mills, KAM Industries, Lafarge Cement Wapco plc and Dangote Cement. Others are Rumbu Sacks Nigeria Limited, BAGCO, Tara Agro Industries, ANAMCO, Bendel Feed  & Flour Mill, Onward Paper Mills Limited, Ladol Integrated Logistics, Intercontinental Distillers Ltd, Tempo Starch & Glucose Ltd,  Coleman Technical Industries Limited, Seven-Up Bottling Co. plc and Flour Mills of Nig plc, among many others, Rasheed Olaoluwa, managing director/CEO, BoI, disclosed during the bank’s interactive session with journalists recently in Lagos.

Other firms such as Notore Chemical Industries Limited, May & Baker Nigeria plc, First Aluminum Nigeria Limited, Nigeria-German Chemicals plc and Nexans Kabelmetal Nigeria plc, among others, have also received loan support from the bank. According to the Managing Director, BoI disbursed N127 billion to micro, small, medium and large enterprises in 2014, a feat that brought the bank’s cumulative disbursement to N781 billion. He said there has been a rapid growth in loan disbursement since 2009. “We are restructuring and repositioning our subsidiaries to increase their effectiveness in supporting BoI’s mandate,” he said. “Overall, we remain committed to the pursuit of our core mandate of providing long-term financial support to small, medium and large companies/projects in Nigeria’s key sectors. And we have adopted/are adopting global best practices in all aspects of operations,” he stressed. In recognition of the above achievements, he said, Agusto & Co recently accorded the bank with the first domestic credit rating of A-, making BoI the only Nigerian development bank to be so rated.

The Kaduna State Government, under the able and purposeful leadership of His Excellency, Alhaji (Dr) Mukhtar Ramalan Yero and the Bank of industry entered into a partnership,& set up a Business Development Fund wherein Kaduna State Government and Bank of industry Contributed the sum of Five Hundred Million (500,000,000) each totaling One Billion Naira (1,000,000,000.00) which is referred to as the “KDSG-BOI MSMEs Fund”.

The objective of the arrangement is to provide pool of fund for lending to entrepreneurs in the state that are engaged in Micro, Small and Medium Businesses. The initiative is aimed at providing access to finance to develop the MSMEs sub-sector, create employment opportunities and to enhance the economic growth and development of the state.