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BoI may be heading on collusion course rallying DBN, other DFIs for N1 trillion

Since the sudden creation of the Development Bank of Nigeria (DBN) by the present administration, there are reasons to suspect that the Bank of Industry (BoI) had been disquiet in the performance of its duties, thus creating a scenario that suggest that it was bracing up for competition.

For example, for the past four year, yearly loan and facility given to businesses by BoI had not crossed  N13b except this year it moved up to N340bn.

Business Hilights had called on the federal government and Minister of Finance to as early as possible call all the nation’s development financial institutions to a round table for description and harmonization of roles to avoid duty duplications.

Now, the BoI had given indications to begin discussion with the newly established DBN and some foreign national as well as multilateral development finance institutions to raise N1 trillion to rev up its risk assets.

It is very clear that DBN is yet to stand on its footing having been created in the last few months, but BoI planning to involve it in partnership may create a disruption capable of confusing the target of the new bank.

Analysts say, BoI should limit its activities to its laid down regulations and allow DBN to find its bearing in the context of the reasons for which it was established in the first instance.

BoI in its argument noted that with rising financing needs in the real sector, the bank noted that it was already bracing up assiduously to the development challenges facing the country by embarking on a N1 trillion fund mobilisation drive to raise suitable financial and non financial resources from within and outside the country to rev up its risk assets to N1.2 trillion and create additional 5 million jobs by 2019.

Acting Managing Director of BoI, Waheed Olagunju, explained that the concessional capital being sought would also enable BOI part finance the industrial component of the Economic Recovery and Growth Plan (ERGP) as well as support ventures that would fast track Nigeria’s realisation of the Sustainable Development Goals (SDGs).

He said it is envisaged that the enterprises BoI plans to finance with the additional loanable funds would generate more than five million jobs, therefore necessitating the commencement of discussions with the Development Bank of Nigeria and some foreign national as well as multilateral development finance institutions to enhance its lending capacity.

While appreciating current efforts by both the Federal Government and the Central Bank of Nigeria at recapitalising the institution, BoI boss added that the bank’s drive to raise additional loanable funds was imperative for the bank to achieve its developmental agenda which includes ensuring that MSMEs account for at least 30 per cent of the Bank’s projected risk assets of N1.2 trillion by 2019, noting that, as at 30th April, 2017 the bank had already exceeded last year’s disbursement to MSME’s by disbursing more than N13 billion as against last year’s N8 billion which represents 62% increase.