Frustrated BoI loan applicants’ give insights, seek bank probe

There has been a growing outcry of thousands of small and medium scale business operators over what they described as business initiative killing activities of the Bank of Industry (BoI).

Several social media are already saturated with complains of upfront fraud condition and endless delays which never materialized, thus forcing business idea to die.

Some of them are already calling for forensic probe of the activities of the bank.

To many, time has come for the bank to be monitored by the public service monitoring agency, the Servicom, to ask for a comprehensive listing of all loan applications approved by the BoI and see what percentage of the supposed loan approvals for industries, were ever disbursed within even six months.

It should be noted that these are businesses which are qualified and have been duly adjudged, so by the Bank, which goes ahead to collect as much as 14% of the approved loans in upfront cash, but never disburses for as long as two years, without any reasons.

According to many of the frustrated genuine applicants, what is worse, is that apart from funds from the federal government through the Central Bank of Nigeria (CBN), the BoI is also collecting billions of naira from state governments across the country, for partnership funding for business expansion for small-scale industries in the states and for years, not a dime of such funds are disbursed to any intended beneficiary.

Earlier this year, a South Western state deposited N500 million with the BoI for counterpart funding of SME’s domiciled in that state more than one year ago. Till date, not one person has been given anything and I know of at least three persons who had received letters of loan offer, concluded all formalities, including getting multiple guarantors in form of serving senior civil servants, paid all non-refundable fees and the 10% deposit, all in cash, yet now more than six months after, mum is the word from the Bank which has collected more than N1.3 million upfront from one industrialist it offered less than N10 million loan.

What is worse, the prospective loanees mostly went to Shylocks to borrow the cash they paid as deposit, in the belief that they will easily pay off the killer loans within one month, since they have fulfilled all conditions stipulated by the BoI. You can imagine how much they now owe the Shylocks who give loans at as high as 20% monthly interest. Five months delay on repayment already attracts 100% interest.

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In August this year, there was a special announcement for the commencement of applications for the Nigerian Artisanal & Small-Scale Miners (ASM) Financing and Support fund.

The Ministry of Mines and Steel Development (MMSD) in August 2017, signed a Memorandum of Understanding (MoU) with the Bank of Industry Limited (BOI) for the management of a N5 billion fund in support of Artisanal and Small-Scale Miners (ASM) in the country.

Under this scheme, a certified Artisanal Scale miner, can access between One hundred thousand naira (N100,000.00) and ten million naira (N10,000,000.00); while a Small-Scale Miner can access between ten million naira (N10,000,000.00) and one hundred million naira (N100,000,000.00) with an interest rate of 5%. This fund is particularly designed to play a catalytic role in the mining sector

Report says to date; nobody has accessed any kobo from the facility.

The pertinent question may be, who is benefiting from the difference between the five to 10% supposed interest rates to SMEs and the 25% to 35% interest rate commercial Banks are apparently rationing out the funds meant for long term investments for hundreds of businesses, as massive short term loans, to a handful of traders and importers of finished goods.

Analysts say due to this large scale development banking fraud, the economic recovery projections of the government will always be wide off mark. Virtually all federal government ministries and the government’s economic indices monitoring agencies will be basing their economic growth projections on funds already given to the BoI, without knowing that such funds are never released to intended beneficiaries for years.

However, some of the frustrated applicants allege that there are reasons to believe the Central Bank is probably complicit in this evil. The government will be shocked at what will be discovered if it opens up a web portal for example, for disappointed Nigerian businesses, to forward proof of BoI’s failure.

Such disappointed small, medium or large-scale industrialists should be asked to also detail how much they have paid into special BoI accounts for years, without getting any loans. Yet a chunk of the payments BoI collects from loan-seeking industrialists are non-refundable. The refundable part of the deposits the BoI is fraudulently collecting, are refunded after upwards of two years at less than 10% interest per annum, when even Bank to Bank lending in Nigeria, is at almost 20% for onward lending to end users at as high as 35%.

Observers say this may be the reason why despite its very low customer base, the Bank had always been competing with major commercial banks in the profits it has been declaring for the past several years.

Efforts to have audience with any top official of the bank to comment on these allegations failed during the course of compiling the report.