Lending Criteria of Bank of Industry
How To Access Bank Of Industry Loan
Every business sooner than later will need access to finance from financial institutions that can give long-term loans at friendly and affordable terms. The Bank of Industry Limited (BOI) Nigeria’s oldest, largest, and most successful development financing institution is such a partner. At the Bank of Industry, the HT Business Consulting is a Business Service Provider for the Bank of Industry.
Lending Criteria of The Bank
The emphasis is on prudent project selection and management; accordingly, it supports quality projects with potential developmental impact. BOI, therefore, considers industries that meet the following criteria:
- Capacity to substantially add to industrial output.
- Projects that use largely domestic raw materials.
- Industry in which Nigeria’s comparative advantages could be converted to competitive ones.
- Ability to promote the expansion of exports through the production of high-quality products that are attractive to domestic and export markets.
- Niche projects that produce for worldwide consumption.
- Projects that create both forward and backwards linkages, with the rest of the domestic or regional economy.
- Ventures that promote inter-state or regional integration.
- Small and medium enterprises (SMEs) that have linkage with large firms, belong to clusters and operate under franchise.
- Enterprises with high employment generation capacity.
- The project must be technically feasible, commercially viable and economically desirable.
- Projects that are environmentally friendly.
- Enterprises that have good management set-up and proper accounting procedures.
- Enterprises promoted by women entrepreneurs.
The following industrial sub-sectors are also accorded priority in the project selection:
- Agro-industries, textile and leather
- Polymer –based industries
- Solid minerals
- Information communication technology (ICT) services
- Small, medium and large enterprises, excluding cottage industries.
- New or existing companies, seeking expansion, modernization or diversification.
- Credit worthy promoters who will be required to prove their commitment to the project by contributing at least 25% of the project cost excluding land.
- Borrowers whose management capability, financial situation (including availability of collateral and guarantee), character and reputation are incontrovertible.
- Clients with demonstrable ability to meet loan repayments.
- Borrowers with no record of unpaid loans to erstwhile development finance institutions and other banks.
Tenure of Bank of Industry Loan
The Bank of Industry provides facilities at tenors that range from 12 to 60 months and above. Since the funds the Bank is mandated to provide is for the manufacturing sector, which returns a longer time frame from start to profitability, the Bank structures its loan tenors to accommodate this incubation period. Moratorium periods are incorporated into our loan tenors to ease repayment concerns.
As part of the fiduciary responsibility in managing funds under its care, the Bank of Industry requires that you pledge some assets to secure your loan. However, the Bank also accepts other forms of security subject to adequate coverage of the loan being provided to you. Types of security the Bank accepts include:
- Legal mortgage on a landed property. The property must be duly registered with a Certificate of Occupancy
- Debenture on assets of the company
- Bank Guarantee
- External Guarantors with Notarized statement of Net worth for loans below N10 million.
Please note that the Bank is willing to share assets previously pledged to other lenders provided the Bank’s loan is adequately covered in the arrangement. Also, note that the Bank is willing to accept third-party collateral.
Requirements For SME/Large Enterprises
1. Formal Letter of Application
2. Photocopies of Certificate of Incorporation and Certified True Copy of Memorandum and Articles of Association of the Company.
3. Photocopies of the Certified True Copy of Forms C02 and C07.
4. Business Plan.
5. Photocopy of title documents to project site (Statutory Certificate of Occupancy or Deed of Assignment).
6. Photocopy of Title Documents (Statutory Certificate of Occupancy or Deed of Assignment) to the Collateral Security. (This must be a landed property in an urban center).
7. Approved Building Plan (If new building).
8. Bill of Quantities or Contractor’s Estimate of Cost to be incurred on Factory Building.
9. Valuation Reports on Factory Building(s) (for existing projects) and property offered as Collateral Security.
10. Quotations for items of plant and machinery (at least 3 quotations from different sources).
11. Three (3) years most recent Audited Accounts of the company (for existing company).
12. Three (3) years most recent Tax Clearance Certificate for the Company and two (2) Directors.
13. Four (4) recent passport photographs of each of the two Directors and the Company Secretary.
14. Evidence of appointment of a Company.
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