Congratulations to Bank of Industry for closing the $1 billion loan: “The transaction is aimed at further improving the capacity of the bank to continue to effectively support Micro, Small, Medium and Large enterprises (across key sectors) of the Nigerian economy with affordable loans of medium to long-term tenor, alongside moratorium benefits…The facility will be disbursed in Naira at single digit interest rates to borrowers with bankable projects.”.
Between 2015 and October 2020, the Bank of Industry with the support of its various stakeholders disbursed over ?945 billion to 3,013,087 enterprises, thus creating over 6.87 million estimated direct and indirect jobs.
With the successful conclusion of this deal, the Board and management of Bank of Industry is confident that the bank is now better positioned to catalyze domestic production and facilitate 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 and especially in light of the planned commencement of the African Continental Free Trade Agreement (AfCFTA) in January 2021.
This is a good deal. I will add that BOI adds a new layer in its operations: keep $10 million of that money for venture funding where founders and entrepreneurs do not have to provide collaterals to get the funds. Rather, BOI takes equity in the companies on behalf of the Nigerian people. Israeli has done this venture playbook successfully.
More so, BOI needs to deepen its interests in digital and web companies. The current model is biased for “physical” businesses. The fact remains that most great digital businesses begin online and over time go “physical”. So, we do not have to be fixated at what is happening during the early phases.
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Amazon is as meatspace as Walmart with Whole Foods. Konga and Jumia are big physical businesses. These businesses might not have been qualified to access BOI’s funds when they were being started. That re-calibration is important.
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Maybe we start by changing the name from BOI to BOE (Bank of Enterprises), because the current mentality and understanding of ‘industry’ doesn’t include digital natives, so there’s already a foundational problem.
The things that hold the greatest wealth and value in the Knowledge Economy are not the things we are fixated with in this part of the world, so until we refocus our thinking, we won’t still know how to put our money where our mouth is.
What they term ‘bankable projects’ are brick and mortar, no thanks to expired knowledge on how the modern economy works.