The process for privatisation of the development finance institution, Bank of Industry (BOI), has advanced to a fresh phase with the appointment of advisers by the Bureau of Public Enterprises (BPE) ongoing, to secure a partial privatisation of the institution.
Managing Director, BOI, Mr. Rasheed Olaoluwa, said the process overseen by the BPE, is yet to determine what percentage of the bank to be sold.
Olaoluwa in a one-day interactive session with journalists to engage the public on various achievements of the bank’s current management, stressed that the federal government through the BPE has been taking steps to privatise BOI.
“Just two days ago, the BPE opened a financial bid for the appointment of advisers. Although the process is on going but not done yet. We do not know what percentage of the bank will be sold, but all we know is that it is going to be a partial privatisation,” he said.
“We do not know the position of the incoming administration, but we just have to keep our fingers crossed,” he said.
The BOI boss added that it has an authorised share capital of about N250 billion, which he said N146 billion is paid up.
“We want to take steps to look at an alternative way of funding the financial institution because our capital has always come from the government. We are looking at other sources already,” he stated.
In terms of Non Performing Loans (NPLs), he said the bank recorded a relative high NPL in the past, but stressed that the bank had embarked on a number of initiatives to manage the NPL downward including loan recovery of loans that were not properly monitored.
“In a nutshell, today, at the BOI, our NPL is less than 5 per cent. The development bank in Brazil, their NPL is 2.2 per cent, the development bank in South Africa, the NPL is 16.8 per cent. With less than 5 per cent as NPL, BOI’s ratio is not bad,” he said.
According to him, Nigeria has not been able to develop its solid mineral space, calling on the federal government to fund a geological data in the country to conduct an international bid to develop the industry.
He however stated that the bank has done a lot to support Small and Medium Enterprises (SMEs), but stressed that what the sector need goes beyond finance.
He added that the bank is giving the loans and also looking at making the lending process more efficient to assist the SMEs.
“This is why why appointed over 100 Business Development Service Providers (BDSPs) to help the SMEs to prepare lendable business plans to access BOI’s business loans,” he added.
He added that the world is going digital, stating Nigeria must also look towards the same direction.
Olaoluwa said the bank is automating a lot of its processes to give SMEs the opportunity to enjoy the benefit of automation of digitalisation.
”A lot of SMEs are unable to keep records because they do not have an accountant who understands the technical details of debit and credit. We are looking at a model to empower SMEs to transact businesses with their mobile phone on their own without the help of any accountant,” he said.
He decried the lack of patronage of locally produced goods, saying that Nigerians must patronise made-in-Nigeria goods in order for the country to achieve economic growth.
“It is our national interest. We are all complaining about no jobs, we are complaining about economic issues, if we do not patronise our local producers, we will not make any progress. There are people who have invested in facilities to produce here and after they have produced, they cannot sell and they go bankrupt and fire people and lay off staff, but if they produce and able to sell, they are able to grow and higher more people translating to economic growth,” he said.
“I am not saying that we should support any producer because there are people who are local producers and they produce trash, but there are few companies producing to meet international standards and such companies should be patronised,” he added.
He said as a development bank, the media is a very important and strategic partner, noting that the media controls the minds of the citizenry.
“We feel it is important that we carry the media along on what we are doing and understand our issues and to also get feed back on areas we have not done well. We have seminared with our BDSPs, so they understand our Risk Assessment Criteria (RAC) and they know exactly what we are looking for,” he said.
He stressed: “If SMEs go to them, they will be able to get the loans. We have negotiated and we have agreed very reasonable token fees for the SMEs to pay. If you are applying for a loan as less than N10 million, all you pay to these BDSPs is just N10, 000 and if the loan is about N10 million and N50 million, all you have to do to get your business plan done to international quality you pay N25,000 and if the loan amount is N50 million and N200 million, the service charge is N50,000.” Thisday
