Bank of Industry Nigeria: how to access loan for your business?

macfranc007 November 23, 2017 Nigeria News today & Breaking news ▷ Read Nigerian newspapers 24/7 Rachael Odusanya

For those who are planning to start their own business in Nigeria, collecting a loan could be difficult sometimes because of the complicated procedures and lack of support from banks. However, the Nigerian Bank of Industry, also commonly known under the abbreviation BOI, could provide you with loans in some cases. This article will teach you how to get a loan from the Bank of Industry in Nigeria.

All about the loan you can get from BOI Nigeria

In this section, you will learn about all the necessary things you need to get a loan from the Bank of Industry.

Loans in Nigeria: who can benefit from the loans Bank of Industry Nigeria provides?

People who have set up a company or enterprise and are in need of funds to develop their businesses can surely apply for a loan; the Bank of Industry does not give loans to individuals or groups of people, only officially registered companies are eligible to apply. The bank will request for the company’s registration number for an LLC and the business name of the enterprise before they can process the loan application.

What projects can the BOI finance?

The bank finances the purchase of industrial equipments for manufacturing, it however does not finance land purchase and building – the equity is expected to finance these things. BOI has an official partnership with ten SME friendly banks which you can obtain loans from at monetary policy rates plus 6 percent.

How does BOI provide the loans and what are the primary requirements for getting one?

The requirements are quite simple once you get acquainted with them. Generally, the bank will not provide loans to borrowers in cash, however, it will pay it to the suppliers and vendors of the equipment the loan is supposed to be for.

BOI loan: how much financial help can the bank provide?

The amount of money the BOI can loan you starts from N5m. Loans below this amount can be provided on the BOI matching fund platform which collaborates with the governments of different states through their BOP (Bottom of the Pyramid) scheme operated by MicroFinance Banks.

Requirements for loan from the Bank of Industry in Nigeria

Collateral requirements for providing the loan

The BOI has some requirements regarding loan security, so those who borrow from it have to pledge assets to secure loans. Nevertheless, the bank can also accept other forms of security in order to adequately cover for the loan. The different types of securities accepted by the BOI include:

Legal mortgage for a landed property which is registered and has a Certificate of Occupancy
Bank guarantee
Debenture on the company’s assets
External guarantees with a notarized statement of net worth included (for loans smaller than N10m)

The bank can also issue loans to business startups if they can provide proof of business experience and have a qualified management and team working on their project.

Documents for loan from the Bank of Industry in Nigeria

The documents for Bank of Industry loan application

Micro Credit:

4 passport photographs of the business owner.
Bank statement of the business enterprise for a period of one year (for already existing business).
Business plan.
Constitution and bye-laws of Cooperative Society (for Cooperative Societies only).
Evidence of availability of collateral security.
Formal letter of application.
Photocopy of certificate of registration.
Photocopy of international passport, driver’s license or national identity card of the business owner.
Photocopy of the current tax clearance certificate of the business enterprise and the business owner.
Sales records for 6 months and operating expenses.

SME/Large Enterprises:

Recently audited accounts of the company for the last 3 years (for companies already existing).
Tax clearance certificate for the company and two directors for the last 3 years.
4 recent passport photographs of two directors and the company’s secretary.
Approved building plan (in case it is a new building).
Bill of quantities or contractor’s estimate of cost to be incurred on factory building.
Business plan.
Evidence of appointment of a company.
Formal letter of application.
Photocopies of certificate of incorporation and certified true copy of memorandum and articles of association of the company.
Photocopies of the certified true copy of forms C02 and C07.
Photocopy of title documents to project site.
Photocopy of title documents to the collateral security.
Quotations for items of plant and machinery.
Valuation reports on Factory Buildings (for projects already existing) and property which is offered as Collateral Security.

How to access loan from Bank of Industry for university graduates?

In 2015, the Bank of Industry launched a campaign for young graduates who are taking part in the NYSC program. The campaign called The Graduate Entrepreneurship Fund has several different purposes:

To help students start their own businesses.
To make NYSC members eligible for receiving concessional loans.
To encourage students to become employers instead of seeking a job for themselves.

To get this loan successfully, the student should do the following:

Pass the screening process.
Attend the capacity building program which lasts 2-3 days and trains young graduates to generate their own business models.
Fill the application form at the Bank of Industry.
Submit a business plan that has potentials of succeeding.

If you have confidence and trust in your business project, you should definitely apply for a loan from the Bank of Industry. Support your idea financially right now with the help of the BOI loan program.

READ ALSO: Business loans in Nigeria