BOI Embarks On Aggressive Loan Recovery

Yemisi Izuora
The Managing Director, Bank of Industry (BoI), Mr. Rasheed Olaoluwa has said that the bank is looking beyond government funding and has therefore initiated more aggressive steps to access other funding options to sustain its operations.
Olaoluwa who spoke at a one day workshop for business editors and industry journalists in Lagos disclosed that the BoI authorised capital currently stands at N250bn, of which the paid up capital is N146bn.

He also said that the government is considering the privatization of the BoI and that the BPE has opened a financial bid for the appointment of advisers.

“We don’t know the percentage that will be sold. All we know is that it is going to be partial privatisation. We do not know what the position of the incoming administration will be on the whole process.

“Beyond recapitalisation, our capital has always come from the government. But we are taking steps that will enable us to look for funding from other sources, he explained.”

He said the need to get more funds for the bank’s activities had made the management to embark on an aggressive recovery of non-performing loans.

Olaoluwa noted that unlike in the past when the non-performing loan portfolio was relatively high, the bank had within a short period reduced it to below five per cent.

According to him, BoI recovered N2.9bn bad debts in 2014, using all available legal instruments.

The managing director said the bank was able to achieve this through a proper loan monitoring strategy put in place by the bank.

The bank also announced that it had disbursed over N127bn to Small and Medium-scale Enterprises in the last one year, adding that the cumulative loan disbursement was in excess of N800bn.

Olaoluwa also stated that the bank had identified SME clusters all over the country and planned to design products to target specific clusters.

He said the bank had assembled business development service providers to help SME owners to package their proposals for funding by the BoI and had successfully negotiated token fees to be charged the SME operators.

“Less than N10m attracts N10,000; between N10m and N50m, N25,000; between N50m and N200m attracts N50,000. I believe 90 per cent of the SMEs in Nigeria can afford these fees,” he added.

The bank’s Executive Director, Small and Medium Enterprises, Mr. Waheed Olagunju, also said the BoI planned to disburse N15bn to SMEs this year.

He said the SME sector played an important role in the economic development of developed countries but noted that the sector could not perform the same role in Nigeria due to multiple challenges.

Olagunju said one of the major challenges that operators were facing was lack of access to the market and urged the government to activate policies to address the problem.

He said, “In other parts of the world, there are indications that 35 to 45 per cent of government procurements are from the SMEs.

“We are in a transition now and politicians are becoming more accountable. The media should play an advocacy role to ensure that public policies are evolved in such a way that they can help market items produced by the SME operators.”

The BoI, according to Olagunju, has decided that by 2019, about 30 per cent of its risk assets will be accounted for by the SME sector.

He noted that between 2001 and 2014, less than 10 per cent of the bank’s risk assets went to the SMEs.

“We realised that if we came up with a risk asset of N608bn, creating over 1.8 million jobs, with less than 10 per cent of that amount going to the SMEs, we probably would have been able to create more jobs if we had approved 30 per cent of our risk assets to the SMEs. This year alone, we have a disbursement target of N15bn and we plan to create about 60,000 jobs,” he added.


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