BoI Raises €1bn to Support MSMEs, Others

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By Obinna Chima

The Bank of Industry (BoI) has raised a €1 billion (approximately $1.11billion) medium term syndicated facility from the international capital market in furtherance of its support for micro, small, medium and large enterprises across key sectors of the Nigerian economy.

The Bank provides relatively low interest rate and innovative financing solutions as incentives towards stimulating interest and growth of entrepreneurship.

According to a statement, in 2019, the BoI with the support of its various stakeholders disbursed a total of N234 billion to 10,145 enterprises, thus creating over 1 million estimated direct and indirect jobs.

The new facility was in line with the focus of President Muhammadu Buhari administration’s focus on revitalising Nigeria’s industrial sector and create 10 million jobs by leveraging the Nigeria Industrial Revolution Plan and the Economic Recovery and Growth Plan The African Export-Import Bank, Credit Suisse, Rand Merchant Bank and Sumitomo Mitsui Banking Corporation were the Joint Mandated Lead Arrangers, Underwriters and Bookrunners of the Syndicated Medium-term Facility.

The investors included the lead arrangers, alongside 20 other international financial institutions.

African Export-Import Bank, Credit Suisse, Rand Merchant Bank and Sumitomo Mitsui Banking Corporation were the Joint Mandated Lead Arrangers, Underwriters and Bookrunners of the Syndicated Medium-term Facility. Investors include the Lead Arrangers, alongside 20 other international financial institutions.

According to statement from the bank, the transaction further confirmed the acceptance of the Bank of Industry in the international financial market, following its first successful fund raising transaction in 2017, which raised $750 million from a syndicate of 16 international banks.

“Among the key factors that led to the success of this deal include amongst others, the impressive credit ratings of the bank (Long Term Issuer Default Ratings of B+, B2 and Aa from Fitch, Moody’s and Agusto respectively), its ISO certifications in both Quality Management Systems and Information Security, as well as the strong strategic partnership that the bank has developed with the Nigerian commercial banks, who provide credit enhancements and de-risking tools to BOI customers,” it added.

It pointed out that the Central Bank of Nigeria (CBN) Governor and the Committee of Governors supported the BoI throughout the entire process with technical advice and all approvals as required that saw the transaction through from inception to its conclusion.

“The central bank also provided BoI with 100 per cent currency swap to mitigate the foreign exchange rate risk. The facility will be disbursed in naira at single digit interest rates to borrowers with bankable projects.

“With the successful conclusion of this transaction, BoI is poised to catalyse domestic production and job creation on a transformational scale, enhance local industry competitiveness, attract domestic and foreign investments, integrate our local industries into domestic, regional and global value chains, grow our export earnings and positively impact the overall economic development of Nigeria in line with its mandate,” the statement added.