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BOI raises $1.11bn for SMEs funding

By NewsDesk,

The Bank of Industry (BOI) has raised $1.11billion (€1 billion) from the international capital market with the aim of building capacity and strengthening structures necessary to render financial support to Micro, Small, Medium and Large enterprises in the country.

BOI, while explaining that the oversubscribed financial system was to ensure continued provision of affordable business loan facilities to organisations in the various sectors of the Nigerian economy, stated that the move was part of President, Muhammadu Buhari’s promise to business owners in the country.

The bank explained that the financial system was designed to further revitalise Nigeria’s industrial sector and create over 10 million jobs for the country’s teeming youth population.

Chief Executive Officer of BOI, Olukayode Pitan, who confirmed funds raised by the financial institution, noted that the present administration aimed to revitalize the industrial sector towards creating over 10 million jobs to reduce unemployment percentage in the country.

Pitan, in a statement released on Friday, added the industrial bank was now 100 percent set to finance business ventures and propel the country into an industrial revolution which waves would vibrate across the globe.

He said: “The transaction was subsequently launched on 15th January 2020 with an initial size of €750 million. Upon closing on 19th February 2020, the deal was oversubscribed by 60 percent. The deal size was thereafter upsized to a sum of €1 billion.

“With the successful conclusion of this €1 billion medium-term syndicated facility, BOI is poised to catalyze domestic production and job creation on a transformational scale, enhance local industry competitiveness, attract domestic and foreign investments, integrate our local industries into domestic, regional and global value chains, grow our export earnings and positively impact the overall economic development of Nigeria in line with its mandate”.

Pitan assured Nigerians that more Micro, Small, Medium and Large enterprises in the country would have access to acquire the loan for business growth, saying, do not forget that in 2019, the Bank of Industry with the support of its various stakeholders disbursed a total of ₦234 billion to 10,145 enterprises, thus creating over 1 million estimated direct and indirect jobs.

The Managing Director stated that the margin recorded between its first successful fundraising event in 2017, in which it raised a total sum of $750 million from 16 international banks and its most recent transaction, which yielded $1.11 billion, was due to its impressive credit ratings, existing ISO certifications in Quality Management Systems and Information Security, and the bank’s relationships with commercial banks in the country, especially in aspects of credit enhancement provision and availability of de-risking tools to its customers.

While commending Central Bank of Nigeria (CBN) Governor, Godwin Emefiele, and his Committee of Governors for their support, which aided the successes recorded during the fundraising campaign, Pitan hinted that the apex bank’s technical advice and timely issuance of approvals further aided the transaction’s success, and a 100 percent currency swap agreement to take effect during loan disbursements.

He disclosed that due to CBN’s support, funds raised from the international market would be given as single-digit interest loans to businesses with bankable projects and that it was expected that the move would aid creating of new jobs, increase of economic viability of existing businesses and an overall aid for the Nigerian economy.

The CEO, however, said “African Export-Import Bank, Credit Suisse, Rand Merchant Bank and Sumitomo Mitsui Banking Corporation were the Joint Mandated Lead Arrangers, Underwriters and Book runners of the Syndicated Medium-term Facility. The investors include the Lead Arrangers, alongside 20 other international financial institutions”.

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