The Bank of Industry is Nigeria’s foremost industrial development finance institution. Over the years, it has provided industrial financing to drive lending to Micro, Small, and Medium Enterprises operating in the country.

Manufacturing, agriculture, and technology are among the sectors seen as key economic drivers that benefit most from the BoI’s lending.

In 2017, the Bank commenced raising funds on the international market with a $750 million AFREXIM loan. Subsequently, it raised $5 billion from the international capital markets through Eurobonds, loan syndications, and green finance instruments.

In 2024. the BoI, under the leadership of Dr. Olasupo Olusi, successfully raised N3.05 Trillion (€1.879 billion) from international financial markets, marking a historic milestone as the most significant amount ever secured by any Nigerian or African development finance institution (DFI).

According to the BoI, the capital financing was achieved through a dual-layer guarantee structure, with collaboration and support from the Africa Finance Corporation (AFC) and the Central Bank of Nigeria (CBN) for optimal risk-sharing.

This structure allowed BOI to secure much lower interest rates than those typically applied to Nigerian debt instruments, resulting in savings of approximately 3.6 percent per annum (or an estimated N295.7 billion over the three-year tenor). These favorable terms will reduce the cost of borrowing for the real sector, making it more competitive.

The syndication attracted considerable interest from diverse international investors, with over 10 new participants, particularly from the Middle East and Asia.

Commenting on the remarkable achievement, the Managing Director/Chief Executive Officer of BoI, Dr. Olasupo Olusi, said in a statement that the favourable terms associated with this funding will facilitate access to low-interest, long-tenured loans, aligning with President Bola Tinubu’s vision for economic growth.

He said the Bank’s “Enlarged balance sheet will boost its interventions and operations and ultimately enhance its developmental impact in bridging the current annual developmental finance funding gap of over $35 billion, support the implementation of the BoI Strategy for 2025 to 2027, and enhance the capacity of BoI to deliver on its mandate.

“The new funds have substantially bolstered the Bank’s balance sheet, increasing it from N3.9 trillion in 2023 to N7.1 trillion by the end of December 2024. This robust engagement underscores BoI’s reputation as a trusted partner in Nigeria’s industrialization efforts and highlights its growing appeal to investors from emerging markets.

“The favorable terms will reduce the cost of borrowing for the real sector, making it more competitive,” he explained.

The Bank has explained that the funds raised would boost its interventions and operations and ultimately enhance its development by bridging the current annual development financing funding gap of over $35 Billion (BCG, 2024).

Similarly, it added that it will support the implementation of the BoI Strategy for 2025 – 2027. One of the key themes is to increase BoI financing in several areas to meet Nigeria’s developmental needs. This will further strengthen the Bank’s financing capacity and enhance the overall performance of Nigeria’s businesses.

Similarly, it will address infrastructure challenges occasioned by the high cost of doing business with manufacturers in Nigeria.

Additionally, the confidence in BoI demonstrated by this historic transaction will enhance its ability to access additional sector-specific funds, particularly funds targeted at vulnerable sectors and segments like Gender, Youth, MSMEs, Agriculture, ESG, and Sustainability.

Furthermore, the capital will enable the BoI to fund specifically targeted programs and impactful projects that will lead to Nigeria’s long-term industrial development on a transformational basis due to the flexibility and extent of funding available to BoI.

Consequently, the raised funds will help the Bank with Credit Risk: Higher/more extended payback periods and leveraging our partnerships to de-risk Lending to MSMEs, Gender, etc., and expand access to financing. Liquidity Risk: Build a strong funding base to support its financing operations; Market Risk: Inflation, foreign exchange and inflation stabilisation and Operational Risk: Help implementation of internal operational strategies including digital transformation.

In addition, green, climate and environmental financing are key considerations of BoI’s new strategic focus. The €1.879 billion fund raised would enable the Bank to play more efficiently in this space.

Some of the achievements of BOI’s landmark fundraising include the most significant single transaction in BOI’s 65-year history, the largest deal by a Nigerian development finance institution, the largest deal by any Nigerian financial institution, and the most significant deal by any African development finance institution, thereby setting a benchmark.

This also resonates with President Bola Tinubu’s New Year message. As one of the major promoters of the National Credit Guarantee Company (NCGC), sharing risks with NCGC will enable BoI to deploy the huge resources that it continues to mobilise from the international financial markets more securely.

BOI loans, particularly to MSMEs, guaranteed under the new scheme would enable the Bank to disburse more loans to Nigeria’s private sector safely.

2024 commemorated the 65th anniversary of the Bank’s empowerment drive in the economy, which boosted industrial growth, facilitated innovation, and contributed to the country’s socioeconomic development.

Dr.  Olusi, while highlighting some of the Bank’s key achievements over time, said: “In 2007, BOI’s authorised share capital was increased to N250 billion to put the Bank in a position to address its mandate better; this was subsequently increased to N500 billion in May 2023.

“In recognition of the pivotal role of MSMEs in national economic development, the Bank in 2014 engaged 122 SME consultants and entered strategic alliances with 10 SME-friendly commercial banks. Today, we have over 300 Business Development Service providers supporting SMEs nationwide. The Bank also has a robust on-lending program with various financial institutions, including microfinance banks and fintechs.

“2015 BOI commenced a national footprint expansion by opening eight state offices. This drive has continued through the years, and I am proud to say that the Bank has a presence in 33 states nationwide today.”

He noted that partnership is one key thread in achieving these milestones through the years.

“BoI has established strategic partnerships with key local public and private institutions and global financial and multilateral institutions to enable the Bank to fulfill its mandate effectively.

“BoI partners with State Governments and Foundations to establish the “Matching Fund” scheme. We also have partnerships with trade associations, such as the National Association of Small and Medium Enterprises (NASME), Nigerian Association of Small-Scale Industrialists (NASSI), and Manufacturers Association of Nigeria (MAN), to deepen real sector financing.

“BoI recently signed a partnership agreement with SMEDAN to provide Nano and Micro Enterprises in Nigeria with an N1 billion fund at a single-digit interest rate. We have partnerships with several other public agencies, like NCDMB, to support specific sectors,” he said.

He added that “In November 2023, the Federal Government of Nigeria appointed BoI as the executing agency for the N200 billion FGN MSME Intervention Fund, which includes an N50 billion Presidential Conditional Grant Scheme (PCGS), an N75 billion Manufacturing Sector Fund, and an N75 billion MSME Intervention Sector Fund.