The $750 Million (N250 Billion) syndicated loan facility which the Bank of Industry (BoI) received from the African Export-Import Bank (Afreximbank) will be disbursed to Micro, Small and Medium Enterprises at single digit interest rate. Managing Director, Bank of Industry, Mr Olukayode Pitan made this disclosure on the last day of the Afreximbank 25th Anniversary and Annual General Meeting during an interview with journalists in Abuja.
Pitan revealed that “the loan will be given to entrepreneurs in Nigeria for a period of between five and seven years, would enable the BoI bridge the funding gap for MSMEs which estimated at about N700 Billion.” This fund he said would be “given to companies operating in the creative industry, manufacturing and gender based businesses to help reduce the unemployment rate in the country and create wealth for small and medium scale entrepreneurs.
“We are looking at small, medium and large enterprises. We are looking at enterprises or companies that have a focus in using local raw materials, companies that generates that generates employment and bring down their cost of borrowing” he said. Pitan stated that “the loan will be deployed at less than ten per cent interest per annum. We are working with the Central Bank of Nigeria so that the loan we will give to Nigerian businesses will be a longer term loan of between seven to eight years for the industrial sector.”
The landmark deal was signed off in the presence President Muhammadu Buhari who insisted on witnessing the agreement signing ceremony in Abuja because the N250 Billion syndicated facility financed by 16 banks (among which are: Africa Export-Import Bank, the ECOWAS Bank for Investment and Development, and British Arab Commercial Bank Plc and four Nigrrian banks based in the United Kingdom) is the single largest facility of its kind to be received by a Development Finance Institution (DFI) in Nigeria.
According to Pitan, “the idea is to support industries. What this loan allows us to do is, it gives additional N250 Billion depending on the exchange rate that is used, between N230 Billion to N250 Billion to deploy to the industrial sector. There is gap in the funding of the industrial sector, to the tune of N704 Billion. This is our way to reduce that gap.”