Why we give SMEs loans below CBN’s lending rate of 18% – BoI

THE Bank of Industry (BoI) said small and medium enterprises in the country are being given loans at a subsidised rate between 9 and 10 per cent below the Central Bank of Nigeria’s (CBN) official rate of 18 per cent to preserve them from collapse.

The BoI managing director, Olukayode Pitan, said this during the bank’s 63rd annual general meeting (AGM) in Abuja on Thursday, May 18.

Pitan called on small and medium-sized companies to access more loans from the BoI to improve their businesses.

It was resolved at the meeting that the bank’s share capital be increased from N250 billion to N500 billion.

Pitan disclosed that shareholders’ funds were over N400 billion, with some shareholders’ funds deposited for shares.

“So when we put everything together, our shareholders’ funds will be very close to N600 billion.

“We are getting towards the target that we have, which the minimum should be about N1 trillion and that will allow us to do more than we are doing now,” he said.

Shareholders expressed optimism that the bank would continue to grow and exceed N5 trillion shareholders’ fund in the coming years.

The chairman of the Board of the bank, Aliyu Dikko, disclosed at the meeting that the total assets of the group grew by 39.2 per cent between 2021 and 2022.

He said the bank maintained appreciable growth in its financial performance in the year.

“Total assets of the group grew by 39. 2 per cent between 2021 and 2022, from N1. 71 trillion to N2.38 trillion, respectively.

“This growth was largely due to the three successful capital-raising transactions worth 1.85 billion euros in the year.

“The group also reported a growth of 11.7 per cent in its total equity between 2021 and 2022, from N384.85 to N429.83 billion, respectively.






     

     

    “Profit before tax also followed the same trend, reporting 15.6 per cent growth from 62. 28 billion to N71. 99 billion in 2021 and 2022, respectively,” he said.

    According to Dikko, loans and advances improved by 3.2 per cent, from N780.48 billion in 2021 to N805.46 billion in 2022.

    The chairman said the remarkable performance depicted the passionate and proactive disposition of the bank, to continue to effectively deliver on its mandate as the macro-economy gradually strengthens.

    He admitted that the BoI challenges encountered during the period, but that it was an opportunity for the bank to perform better.

     

    Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.

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