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How To Get A Loan From The Bank Of Industry (BOI)

Daily Trust

  If you’re a business in Nigeria and you’re looking for external funding for your productive operations, you can apply to the Bank of Industry for that loan. The bank grants loans at relatively low interest rates and fair tenures to profitable enterprises that meet its criteria.
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A Brief Introduction To The Bank Of Industry

The Bank of Industry (BOI) is a public Development Finance Institution that’s owned by the Ministry of Finance, the Central Bank of Nigeria, and private stakeholders. The bank provides funding for SMEs and larger businesses seeking to expand their operations in the country. Established in 2001, the BOI has helped finance many of Nigeria’s top SMEs, especially those in industries that the government considers critical to the nation’s economic growth and relative wellbeing. The bank is headquartered in Lagos, a corporate office in Abuja, and 24 branches spread across Nigeria. There’s more information about them on their website.

What Kind Of Businesses Can Apply For A BOI Loan?

The BOI serves Micro, Small, and Medium Scale Enterprises (MSMEs), as well as Large Enterprises (LE). Although it provides loans to businesses in many sectors, it typically shows a preference for businesses in the following industries: It has specific funds dedicated to companies in some of these industries, as well as entrepreneurs in defined demographics (e.g. the youth).

What Loan Amounts Are Available From The BOI?

The minimum loan provided for micro-enterprises by the BOI is ₦5 million. But the bank’s matching fund, operated in conjunction with state governments, allows for beneficiaries to receive lesser amounts. Bigger SMEs may access loans exceeding ₦10 million, and Large Enterprises may request amounts above ₦1 billion.

Eligibility

SMEs intending to get a loan from the BOI are expected to meet these criteria:
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Things You Should Have Before Applying For The Loan

The Bank of Industry has a pre-approval checklist for organizations seeking a loan from it. The list below is the checklist for SMEs applying for a loan worth less than ₦10 million.

How To Apply For A BOI Loan

You can take these steps to apply for a BOI loan

Fees, Interest Rates, And Tenure

The BOI’s term loans attract interest rates of between 5% and 10%. Structured Working Capital comes with annual interest payments of between 12% and 15%. Successful applicants may also have to pay an Appraisal Fee (1% of total loan), Commitment Fee (1%), Monitoring Fee (0.0125%), Insurance Charge, and Legal Fees. Term loans have tenors spanning from 3-10 years; it’s 2 years for working capital. Moratoriums on loan payment last for between 6 and 12 months from the date of loan disbursement.

Final Words

Small businesses need all the financial help they can get. The paucity of SME funding is a major contributor to their demise in Nigeria. Thanks to the work done by institutions like the BOI, some of them are able to thrive in challenging business environments. Featured Image Source: Daily Trust
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