BOI SIGNS ON 122 BDSPS, LOOK TO IMPROVE SMES ACCESS TO FUNDING
In a bid to address challenge of access to credit for SMEs, and to hasten the credit delivery process, the Bank of Industry (BOI) has signed service agreements, engaging 122 Business Development Service Providers (BDSPs) to increase SMEs’ capacity to apply for and secure financing from the Bank.
Speaking at the event, the Managing Director/CEO, Bank of Industry, Mr. Rasheed Olaoluwa stated that this move had become imperative because even though SMEs account for over 90% of the companies in Nigeria, account for half of the nation’s GDP, and provides employment for more than 30% of its populace, many SMEs have not been able to attract funding because of poorly nackaged and non-bankable business plans and proposals submitted to secure funds.
He added that this strategic partnership with BDSPs was in furtherance of the Bank’s core mandate “of providing long-term financial and business support services to large, medium and small projects”. He also pointed out that this would also help the Bank fulfil its obligations towards the success of the National Enterprise Development Programme (NEDEP), of which the Bank is a key stakeholder.
Mr. Olaoluwa revealed that the selection process that brought about the 122 BDSP firms was rigorous and that the selected companies were placed in three categories, based on their capacity and preferred areas of coverage. BDSPs with a national coverage totalled 28, regional coverage BDSPs were 74, while state-focused BDSPs were 20 in number.
Speaking further, the MD pointed out that the services the BDSPs were expected to provide include “collaborating with BOI to identify credible SMEs that require finance; developing bankable business plans and proposals for SMEs to facilitate their access to finance…guided by BOI’s Risk Acceptance Criteria (RAC)…and ensure that a sound business model id developed and presented; collaborating with BOI to conduct periodic post-finance monitoring of the SMEs.” Other services are to provide post-finance services such as mentorship, hand-holding, financial advice and encourage SMEs to inculcate best practice; while supporting SMEs to develop synergies and linkages with large enterprises, industrial buyers and suppliers along the value chain.
On their part, the BDSPs are expected to make full disclosures to BOI and ensure that all facts presented in loan applications are not misrepresented. They are also required to follow the Bank’s RAC in assisting SMEs access funds, and a success rate of at least 40 percent is anticipated from every BDSP. Further information on the BDSPs can be found on the Bank’s website: www.boinigeria.com/bdsp