News Column

Most Loan Applications Are Substandard, Says BOI MD

July 14, 2014

Kayode Ekundayo and Kayode Ogunwale



Majority of the loan applications to Bank of Industry do not meet expected standard, the new Managing Director of the bank, Mr. Rasheed Olaoluwa, has said.

Speaking to Daily Trust in Lagos, Olaoluwa said questionable claims have led to rejection of most of the applications, adding that the bank has engaged Business Support Firms (BSFs) to process loans applications and assist.

He said: "We engaged the BSFs, they will receive the applications and help to review it, they are the people that will be within your locality, BoI only exists in Lagos and Abuja and six zonal offices. We want to have people who will be in every state and these are professionals who understand how a bankable proposal should look like. They would seat down with SME's and help you to package the request. That is key element of our business process going forward."

He said BoI was optimistic that its key stakeholders will continue to support the bank with equity injection to enable it help in the realisation of the National Industrial Revolution Plan (NIRP).

The managing director said the bank was ready to assist small and medium enterprises, adding that the bank would develop strategies to improve stakeholders' access to funds.

He said: "BoI is trying to achieve a balance in its functions as a Development Finance Institution in terms of delivering social impact and maintaining a sustainable loan infrastructure.

"Although we are confident that key shareholders in the NIRP initiative Ministry of Finance Incorporated and the Central Bank of Nigeria (CBN) will continue to support the bank with some equity injection, considering the fact that there is a lot of demand on government's resources.

"Consequently, we are exploring alternative modes of funding such as continuation of sector specific intervention funds by the CBN, ministries of agriculture, solid minerals and others; managed funds from various state governments and foundations; long-term loans at very low interest rates from multi-lateral/international development institutions."

He added that BoI would explore domestic and international bond issuance and other sustainable annuity sources that may become statutorily imperative in the medium to long term.

He disclosed that in pursuance of the success of President Goodluck Jonathan's transformation agenda, a major focal point of the bank was to help promote employment generation and wealth creation, through access to development funds.

He also disclosed that BoI has since inception, till date, disbursed over N600 billion loans to small, medium enterprises, saying that the small medium enterprise sector will receive adequate attention from the development bank.

"As you are aware, our Honourable Minister in the Ministry of Industry Trade and Investment, Dr. Olusegun Aganga, is leading the efforts to industrialise Nigeria and to create millions of jobs in the process. At BoI, we're passionate about these objectives."

He said that he haS also discussed with Adesina on issues relating to the various agricultural development funds managed by BoI as part of the minister's efforts to transform Nigeria's agricultural sector.

"We are in agreement that there is room for wider collaboration between his ministry and BoI, especially in the area of financing the agricultural value chain," he said.

He unfolded the bank's agenda to pursue good corporate governance, sound risk management and compliance, venture capital investments, partnerships and collaborations, customer service responsiveness and create linkages between innovation and industry.


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Source: AllAfrica


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