MICROCAPITAL BRIEF: Nigeria’s Bank of Industry (BOI) to Set Up Microcredit Fund for Microentrepreneurs in Effort to Promote Financial Inclusion

The Bank of Industry (BOI), which was established by the Nigerian government to promote the industrial sector in Nigeria, recently announced plans to establish a microcredit fund to assist microentrepreneurs in an effort to promote financial inclusion and reduce the risks associated with the small and medium-sized enterprise (SME) industry. BOI’s managing director, Evelyn Oputo, was quoted as saying, “In continuation of its drive to deliver on its mandate, BOI has identified some gaps in terms of funding, capacity building and mentoring amongst other challenges facing a segment of potential entrepreneurs who are either unserved or under-served vis-a-vi[s] access to finance and other developmental support services. […] The approach is to set up a dedicated micro-credit fund [administered] through microfinance banks. It is estimated that 70 percent of the Nigerian population […] are at the Bottom of the Pyramid [BoP]… It is this group at the BoP that the BOI intends to serve […]” The target size of this fund was not released.

The creation of this fund will reportedly involve the participation of the following Nigerian organizations: the Small and Medium Enterprises Development Agency, a government agency established to promote Nigeria’s micro-, small and medium-sized enterprises; the Association of Local Governments of Nigeria, a nonprofit representative body for local governments in Nigeria; the Organised Private Sector, a lobby platform for private sector associations; and the Federal Institute of Industrial Research, an institute of the Federal Ministry of Science and Technology mandated to accelerate industrialization in Nigeria.

As of December 31, 2011, BOI reported total assets of NGN 220 billion (USD 1.4 billion).

By Lena Phillips, Research Associate

About Bank of Industry (BOI)

The Bank of Industry (BOI) was originally incorporated in 1964 as the Nigerian Industrial Development Bank. It was restructured as BOI in 2001. BOI is a development financing institution with a mandate to promote the emergence of a competitive industrial sector in Nigeria. As of 2012, Nigeria’s Ministry of Finance holds 58.86 percent of BOI’s shares, the Central Bank of Nigeria holds 41.12 percent of BOI’s shares and private investors hold less than 1 percent. As of December 31, 2011, BOI reported total assets of NGN 220 billion (USD 1.4 billion).

Sources and Additional Resources:

VanguardNgr.com Article, by Nkiruka Nnorom, “Financial inclusion- BoI to set up micro-credit fund”, http://www.vanguardngr.com/2012/12/financial-inclusion-boi-to-set-up-micro-credit-fund/

MicroCapital.org Article, 3 January 2011: “MICROCAPITAL BRIEF: Savings Government of Nigerian State of Ondo and Bank of Industry (BOI) Disburse $13m to Microfinance Scheme”, https://www.microcapital.org/microcapital-brief-government-of-nigerian-state-of-ondo-and-bank-of-industry-boi-disburse-13m-to-microfinance-scheme/#more-8990

MicroCapital Universe Profile: Bank of Industry (BOI), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Bank+of+Industry+%28BOI%29

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