Bank of Industry Loan Requirements

Bank of Industry Loan Requirements

The Bank of Industry works with several partner institutions, and it exists to provide long-term funding to the industrial sector of the Nigerian economy. It focuses on providing credit to small and medium-sized enterprises, as well as large businesses. However, to request for loan for this institute, it is mandatory to meet the Bank of Industry loan requirement.

The purpose of the  Bank of Industry loan may be provided and used to expand, diversify, and modernize existing enterprises. This type of loan differs from a Personal loan which can be requested by individuals, rather, it is a type of loan for the support of businesses offered by the federal government of Nigeria.

Therefore, in this article, we will provide a comprehensive guide on what the Bank of Industry loan requirements are and how to apply for Bank of Industry loans.

What Is The Bank Of Industry

Bank Of Industry Loan Requirements
Source: boi.ng

The Bank of Industry (BOI) is Nigeria’s oldest and largest Development Finance Institution (DFI) currently operating. It is owned by the federal government of Nigeria. This bank is the successor company to the Nigerian Industrial Development Bank (NIDB), which was established in 1964.

The Bank of Industry has four subsidiaries, namely:

  • Leasing Company of Nigeria (LECON)
  • NIDB Trustees Limited (NTL)
  • NIDB Consultancy and Finance Limited (NIDB Consult)
  • Industrial and Development Insurance Brokers (IDIB)

What Are The Eligibility To Access a Loan And The Type Of Businesses BoI Finance?

Loans can be easily accessed by an individual or a group (solidarity group or registered cooperative society). The Bank of Industry finances a wide range of businesses in the listed sectors including Manufacturing and processing, Agriculture and Forestry, Trading, Service, and Healthcare.

What Are The Bank Of Industry Loan Requirements?

Bank Of Industry Loan Requirements
Source: boi.ng

To be eligible for a Bank of Industry loan, your company or business must be registered with the Corporate Affairs Commission (CAC). You must have a registration number for a Limited Liability Company or a Business Name. 

You will also need to meet at least one of these general Bank of Industry loan requirements:

  • Capacity to promote the expansion of exports worldwide
  • Ability to add to Nigeria’s industrial output
  • Production of high-quality products for the domestic market
  • Projects that mainly use domestic raw materials
  • Businesses that can employ a lot of people
  • Projects that promote inter-state or regional collaboration
  • Projects that are both technically feasible and commercially viable

How To Apply For a Bank Of Industry Loan

Bank Of Industry Loan Requirements
Source: boi.ng

There are options to apply for a Bank of Industry loan online or in person. Not every loan will have the same requirements, the requirements will depend on the size of your business and the amount of money you are applying for.

Note that When applying for a loan, you must provide personal and financial information, including proof of identity, income, and address. Also, Banks generally request information about your loan purpose, income, and monthly expenses to determine your eligibility and loan terms.

In addition, Obtain all necessary documents and information before you apply for a loan to help you get your funds faster. You will also need to provide some documents including bank statements and a statement of what you intend to use the loan money for.

Below is a list of what you may need:

1. Have An Account

To apply for a Bank of Industry, your business must already have an account with the Bank of Industry.

2. Request For An Application Forms

A completed loan application form and a formal loan application on letterhead. The application form will usually ask for information such as your full name, contact information, address history, date of birth, and social security number.

3. Financial Documents

Audited financial accounts for the last three years, or a statement of affairs for businesses less than one year old

4. Business Documents

To apply for the Bank of Industry loan, you need to obtain business documents such as A certificate of incorporation, memorandum, articles of association, and a business plan.

5. Bank Statements

You will need to provide your Bank statements for the last 12 months from at least two banks.

6. Personal Identification

Some of the personal means of identification required are your passport, driver‘s license, permanent voter card, or other means of identification for the business‘s chief promoter and at least one director.

7. Security

For loan security, you need to present A bank guarantee, legal mortgage, or other security for the loan.

8. Guarantor

Also, a guarantor is often required for loans so A guarantor or more than one guarantor cm be requested, depending on the loan size.

Note that your guarantor must provide the following:

  • Valid means of identification
  • 2 recent passport photographs
  • Utility bill (within the preceding 3 months)
  • Statement of account for a minimum of 6 months and pay slips covering an equivalent period for salary-earning guarantors
  • Signed post-dated cheques

How Long Does It Take To Obtain a Loan?

Once all loan requirements have been fulfilled by the prospective borrower, the loan processing time is usually 30 to 40 working days. More time will be required to process bigger loan requests. And also the bank will normally disburse the loan within 7 working days.

Loan repayments can be paid at the bank or any of the bank’s correspondence banks nearest to you.

Does The Bank Of Industry Require Collateral?

Yes. the Bank of Industry requires that you pledge some of your assets as collateral. This collateral does not have to be physical property, other forms of security are accepted including:

  • Legal mortgage on a piece of real estate
  • Bank Guarantee
  • Third party collateral
  • External or third-party guarantors
  • Debentures on assets of a company

Does The Bank Insist On Savings Alongside Loan Repayments?

Yes, the bank’s loan repayment plan includes an ongoing savings of 20% of the approved loan over the tenor of the loan. For example, if the bank approves a loan of N100,000  with a tenor of 12 months, the borrower will remit N8,333.33 as compulsory savings in addition to the monthly loan payment.

How Much Interest Does The Bank Of Industry Charge?

The Bank of Industry’s interest rate is usually 9% per annum. This may be lower or higher depending on the exact finance product or scheme applied for. Other applicable charges may also apply, such as processing fees, commitment fees, appraisal fees, and monitoring fees.

What Is The Maximum Loan I Can Access?

Generally, you can only apply for a minimum of 5 million Naira loan. Also, the amount of loan a prospective borrower can access depends on an assessment of the capacity to repay and the adequacy of the collateral pledged.

Conclusion

Gathering the information and documents you’ll need before applying for a BOI loan can save you time and help you avoid potential funding delays. Ensure all your paperwork is legible and provide documents as quickly as possible to make the process quick.

Not all loan amounts have the same requirements, so make sure you know the general documentation criteria before applying. This way, you can increase your chances of approval and receive your funds more quickly. This article has provided a comprehensive guide on the Bank of Industry loan requirements and we hope it is helpful to your search.

Reference

  • Sukfin.com
  • boi.ng
  • boimfb.com

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