FG disbursed N531bn loans to businesses in four years –Investigation

Between January 2015 and December 2018, the Federal Government through the Bank of Industry disbursed a total of N521.5bn to large, medium and small enterprises.

The amount, which is contained in the annual financial statements of the bank covering 2015 to 2018, is part of the intervention programme of the government as encapsulated in the Nigerian Industrial Revolution Plan.

An analysis of the amount showed that the sum of N83.5bn was disbursed in 2015.

For the 2016 fiscal period, the bank provided the N65.9bn as a credit to businesses, while the 2017 and 2018 fiscal period had N112.5bn and N259.6bn respectively.

Speaking on its development programme, the BoI Managing Director, Mr Olukayode Pitan, said the bank would continue its intervention in various sectors of the economy.

In partnership with the Federal Government with respect to its Government Enterprise and Empowerment Programme, a component of the Social Investment Programme, he said the bank facilitated the disbursement of N29bn nationwide through its flagship products such as TraderMoni and MarketMoni.

These products, he noted, were specifically aimed at providing soft loans at no interest rate to micro-entrepreneurs.

He said the bank was working with the Federal Government in the implementation of the N-Power programme, which is also part of the Social Intervention Programme.

He said under the programme, soft loans worth N15.34bn were provided to beneficiaries to purchase work-tools in sectors such as agriculture, health and education.

Pitan told our correspondent in an interview that the bank raised over $750m last year to finance the operations of companies in the country.

He said through the ability of the bank to raise funding at a low-interest rate, more companies could have access to funds at an interest rate that was less than 10 per cent.

The BoI boss said the bank would continue to support sectors that would not only create jobs but had the potential to contribute significantly to the growth of the economy.

He said, “We are already working to raise more money in 2019 because the major raw material in BoI is money for long tenure.

“So you can be able to get money from BoI at 10 per cent for eight years and so this year, we would like to increase the size of our balance sheet.

“We want to do more than we did last year. We want to have more Nigerians create more employment and we hope we can be able to generate good returns for our shareholders.”

On the repayment of the loans, he said that the bank had adequate professionals that could carry out an effective risk assessment on any loan before approvals would be given.

He said, “We have a good board, the management is professional and members of staff are well trained. We have learned from some of the Development Finance Institutions that have failed and these have helped us a lot because we have a thriving and a well run financial institution.”

On challenges facing the bank in its development programme, he said the rate of inflation was making the cost of funds expensive.

He said, “It is very challenging for a bank like BoI to be lending at 10 per cent. Basically, we are lending money below the rate of inflation. It means the funds that we lend out are subsidised.

“Everybody knows that it makes sense to borrow money at 10 per cent rather than borrow at 25 per cent that you are currently paying to commercial banks.”

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