In a manner never attained in its history, Bank of Industry showed tremendous strength in its 2016 financials as it nearly doubled the numbers of the previous year, a feat linked to robust management, writes Kunle Aderinokun
As Nigeriaâ€™s premier development financial institution, Bank of Industry (BoI) is satisfying its mandate of promoting entrepreneurial endeavours. This is evident in its deeper involvement with small, medium and large enterprises, whose growth it preoccupies itself in nurturing.
Statistics lend credence to this as revealed in the bankâ€™s 2016 annual report and financial statements, where it recorded impressive results in all performance indicators.
For instance, BoI disbursed a total of N8 billion to SMEs in 2016, representing a significant increase of 42 per cent over N5.64billion in 2015. Likewise, the bankâ€™s loans and advances rose by 10 per cent to N171billion in 2016 from N156billion in 2015.
Analysis showed that the quality of its risk assets reflected tremendous improvement as it recorded a reduction in the ratio of non-performing loans (NPL) to 3.72 per cent in 2016 from 5.87 per cent in 2015. This feat was achieved during the year, when the economy was plagued myriad challenges and the average ratio of non-performing loans in the banking industry rose sharply to 14 per cent which is beyond the Central Bank of Nigeriaâ€™s threshold of 5 per cent, further analysis revealed.
The foregoing led the bank to achieve an operating profit before tax of N17billion in the review year, which represented 44 per cent increase over the N11.9billion posted in 2015.
In his remarks on the performance, which is described as unprecedented in BoIâ€™s history, acting Managing Director/CEO, Mr Waheed Olagunju, attributed the feat to strong commitment to professionalism and strict adherence to global best practices by the bankâ€™s competent, dedicated as well as passionate management team and staff.
Olagunju enthused that the achievements also culminated in BoIâ€™s consistently high ratings by international and domestic rating agencies being upgraded and affirmed. According to him, while Moodyâ€™s assigned BoI Aa1 in 2016 up from Ba3 of 2015, Agustoâ€™s rating of AA- in 2016 was higher than A+ of 2015. AA+ assigned by Fitch in 2015 was affirmed in 2016.
Apart from being highly rated by worldâ€™s renowned rating agencies, BoI has over the years received awards and laurels from both within and outside Nigeria. The latest of the awards was the one conferred on the bank by the Institute of Chartered Accountants of Nigeria (ICAN) recently, at its yearly dinner and awards, for its outstanding contributions to national development.
Besides BoIâ€™s continuous efforts at developing products and services that best meet business needs, the bank has spearheaded several special interventions in many sectors of the economy. Such interventions include: Federal Government (FGN) Special Intervention Fund for MSMEs; N235 billion CBN Intervention Fund for Manufacturing Sector; and N300 billion Power and Airline Intervention Fund (PAIF).
In its kitty are matching and managed funds tailored towards addressing specific needs of various projects. The matching funds are BOI/State Matching Funds and BOI/Dangote Foundation Matching Fund while managed funds are BOI/CBN Intervention Fund, Cassava Bread Fund, Cottage Fund, FGN Special Intervention Fund For MSME (NEDEP), National Programme on Food Security (NPFS), Rice and Cassava Intervention Fund, Sugar Development Council Fund, NAC Fund and Cement Fund.
Added to its series of interventions, BoI recently signed a Memorandum of Understanding with the National Council for Arts and Culture (NCAC) to promote the art industry in Nigeria. The value of the partnership is N300 million. The MoU signed by Olagunju and Director-General, NCAC, Otunba Runsewe, would allow the bank to lend to arts entrepreneurs and stakeholders in the creative industry at a single digit rate over a medium and long term.
Minister of Information and Culture, Lai Mohammed, who was presented with a copy of the MoU lauded the agreement, saying it would create 200,000 jobs in the sector and similarly serve as a catalyst for the development of the countryâ€™s craft industries.
Mohammed commended Runsewe for putting together â€this momentous eventâ€ just a few days after assuming office as the NCAC DG, and also thanked Olagunju for his support for the Creative Industry.
Olagunju noted the partnership would add value to Nigeriaâ€™s natural endowment, diversify the economy and achieve inclusive economic growth by using local contents and labour. He stressed that officials of the bank would be on ground to ensure that the disbursed loans are well utilised, adding that the bank would partner with traditional rulers to support the arts industry by replicating the role played by the late King of Thailand, Bhumibol Adulyadej, whose support allowed arts to thrive in the South-east Asian country. â€˜â€™Some countries earn billions of dollars from the production of handcraft. For instance, Thailand earns between $4-5billlion annually from the export of handcraft. Through this agreement, we will link our entrepreneurs with foreign market and propel the handicraft industry in Nigeria to the level that has been attained internationally,â€™â€™ Olagunju said.
Runsewe described the partnership as a new dawn for the country in its bid to promote culture as the new oil and create jobs for a mass of unemployed people.
Similarly, BoI instituted a programme for the teeming unemployed youths across the country to help lessen burden of the high rate of unemployment . Called The Youth Enterprise Support Programme (YES-Programme), it was designed to address the worrisome phenomenon of youth unemployment in Nigeria by developing the capacity of the youths and funding their business ideas. The YES programme is aimed at equipping young people with the skills and knowledge to be self-employed by starting and managing their own businesses.
Participants are drawn from young aspiring entrepreneurs between the ages of 18 and 35 years, with innovative ideas who must have a minimum educational qualification of an Ordinary National Diploma (OND).
The objectives of the YES-Programme are: â€œTo create an interactive learning platform to train young aspiring entrepreneurs in Entrepreneurship, Business Management and Technical Skills that will ultimately translate into improved efficiency and productivity; To kindle the entrepreneurial spirit of the youths; To act as an incubation centre, where business ideas are nurtured to their full potential as well as entrenching global best practices by inculcating a culture of innovation-driven entrepreneurship and ethics in the programme participants.
Others are: â€œPromotion of self-employment among graduates of institutions of higher learning, thereby changing their job-seeking mind-set; and to deepen financial inclusion by de-risking the young aspiring entrepreneurs and making them eligible for small business loans to be provided by BOI.â€
Meanwhile, the leadership style and policy implementation acumen of the acting managing director attracted the attention of two state governors recently. The two governors, namely Nasir el-Rufai and Aminu Bello Masari, spoke words of commendations about Olagunju for his purposeful leadership and policy strides he had led BoI in taking in the areas of entrepreneurship and job creation.
El-Rufai had said : â€œWaheed Olagunju as acting managing director of Bank of Industry has done so much in the few months he has acted as MD to help set the state governments in Nigeria, not just Kaduna but virtually all the 36 state governments with supports necessary to create jobs.â€
According to him, â€œOne of the most important programmes he launched is the Youth Employment Scheme, which all the state governments are enjoying . So I felt it was necessary for one governor to be here to express our support and appreciation for his leadership.â€
Besides, El-Rufai had also noted: â€œIn addition, Bank of Industry and the Kaduna State Government have partnered on several projects: The Kaduna State Entrepreneurship Scheme (KAD-STEP) as well as our collaboration to acquire majority shares of Peugeot Automobile Nigeria. So Waheed is not just a brother, member of our family, but also someone that has supported Kaduna State and indeed all the 36 states to address one of the most pressing challenges facing Nigeria: job creation and advancement of economic opportunities.â€
In his own comments about Olagunju, Masari said, â€œIâ€™m happy and impressed by the way acting MD is looking after BoI.â€
It would be recalled that in 2006, during his speech at a send-off ceremony organised for him by BoI, the former chairman, Ambassador Zakari Ibrahim, said: â€œ If you permit me, however, I would particularly single out for mention, the Secretary to the Board, Mr. Waheed Olagunju, for the selfless service he rendered throughout the period of our stewardship. Your contributions are highly appreciated.â€
BOI was, in 2001, reconstructed out of the Nigerian Industrial Development Bank (NIDB) Limited, which was incorporated in 1964. The bank was established in 1964 with an authorised share capital of Â£2 million.
The International Finance Corporation, which produced its pioneer Chief Executive held 75 per cent of its equity along with a number of domestic and foreign private investors. Although the bankâ€™s authorised share capital was initially set at N50 billion in the wake of NIDBâ€™s reconstruction into BoI in 2001, it has been increased to N250 billion so as to put the bank in a better position to address the nationâ€™s rising economic profile in line with its mandate.
Following a successful institutional, operational and financial restructuring programme embarked upon in 2002, the bank has transformed into an efficient, focused and profitable institution that is well placed to effectively carry out its primary mandate of providing long term financing to the industrial sector of the economy.