Nigeria, January, 13 2015 - The Bank of Industry (BOI) has earmarked the sum of N19.8 billion to fund micro, small and medium enterprises (MSMEs) in states across the federation.

The managing director, Bank of Industry (BoI), Mr Rasheed Olaoluwa, dropped this hint during the Africa Capitalism Institute’s inaugural global advisory meeting which discussed: “Africa Capitalism: Maximising Local Value Creation,” meant to provide fresh insight on what should be done to raise the level of industrialisation and intra-African trade as well as raise an army of entrepreneurs in the continent.

Olaoluwa, who represented the federal government at the panel discussion, further disclosed that the bank has signed memorandum of understanding (MoU) with 18 states governments to support the MSMEs as a way of facilitating its support to the MSMEs in those states.

According to him, the BoI and the affected state governments had agreed on certain criteria for the support.

“Before we grant a loan, the state government must recommend because we usually deal with the Ministry of Commerce in the states. So they will be the ones to recommend the applicants to us.”

According to him, the development of the MSME sector in each of the participating states, majorly through the Bottom of the Pyramid Scheme, is a new initiative aimed at deepening the bank’s credit offerings to micro entrepreneurs through micro finance banks in each state. Olaoluwa further told the panel that the bank launched its own sector specific fund called the “Cottage Agro Processing (CAP) Fund” with the sum of N5 billion to support the agro industry in the country in the last quarter of 2014, adding that many applications had been received with respect to accessing the fund.

The CAP Fund, according to him, is designed to finance 1,000 cottage projects with focus on processing activities across the country. Olaoluwa stated that loan applicants had only to come prepared with viable business plans to access the fund and were expected to utilise the loans judiciously, add value and create jobs.

He disclosed that the loans are given at a single digit interest rate of nine per cent per annum with a total management fee of one per cent, for five-year tenure with a moratorium of six months and was expected to create an estimated 20,000 direct and indirect jobs. The priority products for each state have been identified and a number of partners have been pooled together to ensure effective operation.