The Bank of Industry, BoI, recovered a total of N2.9 billion bad debts from its customers in the SMEs and large enterprises sector of the economy in 2014. The bank also blacklisted 22 other customers of the bank for loan defaults. Rasheed Olaoluwa, the bank’s Managing Director, stated this during the bank’s media parley with Business Journalists in Lagos.
According to him, the N2.9 billion was recovered from the debtor customers through the efforts of the bank’s loan recovery team, the Economic and Financial Crimes Commission, EFCC and the courts.
“It is the duty of the bank to lend money to companies in the large and small business sectors and to get the money back with single interest digit , but if the borrowed funds are not paid back it will definitely affects our ability to loan others. “Development Finance loans are not national cake. We expect customers to pay back,” he said.
He urged existing and prospective customers of the bank to emulate the ilks of Innoson Vehicles Manufacturing Company Limited, Amasco International; Happiness Foam, Nigerian Foundries and six other companies who borrowed money from the bank twice and have fully repaid them and have been inducted into BoI Hall of Fame.
He further stated that the need to get more funding for the bank’s operation had made the management embark on aggressive recovery of its non-performing loans. He said that unlike in the past when the volume of non-performing loans was relatively high, the bank had reduced it to below five per cent within a short period. He said that the volume of the bank’s non-performing loans (NPL) was relatively high in the past, but the bank had embarked on initiatives to manage it downward, including loan recovery.
“The development bank in Brazil, their NPL is 2.6 per cent; the development bank in South Africa is 16.2 per cent. In Nigeria, among the commercial banks, the average in the industry is about six to seven per cent,” he said. On the 22 blacklisted firms, he explained “We didn’t blacklist these companies just because they were unable to pay, no. We all understand that sometimes, you can have difficulties and you may make genuine efforts to pay but unable to pay.
This is not the category of people we have blacklisted. The people we are talking about are people who have deliberately defaulted. They are customers of shady character and questionable integrity. Customers who diverted loans meant for the acquisition of plant and machinery to ventures outside the agreement signed with the Bank. Some of these customers provided cloned title documents, thus committing outright frauds.”
