BoI moves to increase financial intermediation in real sector

Written by Femi Adekoya

IN line with its mandate, the Bank of Industry has unveiled plans to increase financial intermediation efforts in strategic sectors of the economy in a bid to aid job creation and real sector’s contributions to the nation’s Gross Domestic Product (GDP).

    According to the bank, the move would see it increasing its commitment to existing and prospective customers who repay their loans as and when due.

  To this end, the bank at the weekend, inducted ten manufacturers in its hall of fame, a scheme introduced to honour some of its customers who have shown excellent performance by repaying the loans granted to them conformably.
   The ten manufacturers that were shortlisted by the development bank include, Ammasco International Limited, Kano; Cement Company of Northern Nigeria, Sokoto; Cobef International Limited, Port Harcourt; Happiness Foam Industries Nigeria Limited, Benin; and Innoson Technical and Industrial Company Limited, Enugu.

   Others are Nigerian Aluminium Extrusions Limited, Lagos; Nigerian Foundries Limited, Lagos; Paul B Nigeria Limited, Enugu; Rumbu Sacks Nigeria Limited, Kano; and Supercor Industries Limited, Bauchi.

  Managing Director/ Chief Executive Officer, BoI, Rasheed Olaoluwa, said the companies obtained long-term credit facilities from the bank at least twice and fully repaid same conformably.

  He explained that the banking intermediation model depends on the ability of a bank to mobilise funds and the bank’s ability to collect the loans granted.

    Being a development financial institution that derives its funding from government rather than from depositors, Olaoluwa noted that the effect of any loan default is more severe, with socio-economic consequences.

    He added that default in loan repayment cannot be encouraged as such actions deprive other Nigerian businesses the needed access to finance.

   According to Olaoluwa, the companies inducted into its hall of fame have proven that integrity is neither a function of size nor environment but character.

   “We congratulate and celebrate the inductees. We are very proud of them,” he said

   “It is our hope that more customers will be admitted into this Hall of Fame over time as their loan performances, character and integrity merit such honour. This is, therefore, a challenge to all our existing and prospective customers,” he added.

 The development bank’s helmsman, however, revealed that a total of 24 companies have been blacklisted by the bank over shady and fraudulent practices.

    According to him, these are customers of shady character and questionable integrity and customers who diverted loans meant for the acquisition of plant and machinery to other ventures outside the agreement signed by the bank.

  “Some of these customers provided cloned title documents, thus committing outright fraud. A total of 24 companies have been so identified, and they will henceforth experience the ignominy of belonging to our Hall of Shame,” he said, stressing that BoI takes loan recovery seriously because the resources so borrowed are collectively owned.

     Responding, Chief Executive Officer, Innoson Technical and Industrial Company Limited, Innocent Chukwuma, said the loans borrowed from the bank has made him create 7500 jobs in his car assembly plant, adding that the funds have enabled him to have the biggest equipment in plastic manufacturing in West Africa.

“I have borrowed loans from BoI for about four times. There is no request I make to the bank that it will not honour owing to my repayment system. Anybody who follows this system will benefit very well from the bank,” he said.

   Chief Executive Officer, Nigerian Foundries Limited, Vassily Barberopoulo, said the bank’s loans have put the firm in good financial stead, having got the oil and gas casting contract from an international organisation.