Saddled with the mandate of rapid industrial acceleration of the Nigerian economy, the Bank of Industry (BoI) through its Large Enterprise operations, succeeded in growing the balance sheet from N700b in 2017 to N1.1trillion as of Dec 31 2018. In this interview with Omolara Akintoye, the Executive Director, Large Enterprises at Bank of Industry (BoI) Simon Aranonu speaks on how the bank is financing ailing industries, expanding the existing ones, as well funding the Nigeria’s movie industry, creative industry and diagnostic centres, among others. Excerpts.
As the Executive Director of Large Enterprises, where was BoI when you assumed the office and where is it now?
As the Executive Director in charge of Large Enterprises, in the last 18 months, we have grown the balance sheet from N700b in 2017 to N1.1trillion as of Dec 31 2018. We have also raised about $1billion in 2018 alone. $750m was raised from a syndicated facility lead managed by Afrexim bank Cairo and $200m from Nigeria Content Development Management Board. In 2018 alone we, disbursed loans of over N270 billion more than we have done in the last three years put together. Our profit was N36 Billion (One hundred million dollars) in 2018 as against N22b the previous year.
Can you throw more light on BoI mandate and how far you have been able to achieve it?
BoI’s mandate is to provide finance and other support towards reactivation of ailing industries and expansion of existing ones. BoI is doing its best towards carrying out this mandate. Today we provide loans at between 9% and 10% to industries. No other bank aside CBN does that. We have raised funds from many multilateral agencies with the support of CBN. We provide these funds to Micro, Small, Medium and Large Enterprises. Our bank is rated AA by Fitch and AA by Moody’s, which affirm our international rating and confirm we employ global best practices in delivering our services. We obviously have a long way to go, but we making major progress.
How do you handle non repayment issues, and how many defaulters do you have?
Like any other bank those who borrow from us and have the capacity to pay but refuse to pay will not be allowed to go free. The machinery of legal process will take its course.
However, given that we are a development bank, we are more patient with our borrowers. When a customer who borrowed defaults in repayment, we support them in diverse ways. We will restructure such loans and grant them extension. In some cases we provide additional funds if that would solve the problems. We also provide consultants called Business Development Service Providers (BDSPs)
who advise SMEs and help them package credit facility requirements. Generally our loan process is very rigorous and our risk management process is extremely robust. This ensures our loan default is extremely low.
You often inducted some persons into BoI Hall of Fame, what is the position now?
Every year we induct some customers into our hall of fame. This is a privileged group of customers who have borrowed at least three times and paid back their loans. We celebrate them yearly. They enjoy special concessions such as accelerated loan approval processes each time they apply for a new loan. We do this to encourage borrower’s good behaviour.
Apart from Innoson Vehicle Manufacturing, how many successful manufacturers have you supported?
Innoson is just one out of our thousands of customers. We provide financial support for over 90 percent of Nigeria’s manufacturers. In fact, the Manufacturers Association of Nigeria (MAN) has a representative on board of BoI. Beyond the large enterprises, we finance small scale manufacturers all over the coountry. We serve them from our 22 branches across the nation. Our Micro Enterprise Directorate lends money to the bottom of the pyramid by encouraging financial inclusion. Through that Directorate, we created TRADER MONI and various government-funded poverty alleviation products.
As part of your rapid industrial acceleration mandate, what areas does it cover?
Besides hard manufacturing, we have funded soft service industry. We have funded the creative industry heavily through movie content development financing and movie theatre. Today over 70 percent of the movie theatres in Nigeria were financed by BoI. We have financed many hospitals and diagnostic centres. Were currently financing the biggest cancer treatment centre in Africa which is under construction, we have financed and equipped the hospitality industries through the equipment of many hotels. We have been financing the solar energy development across the country by setting up a special single digit interest rate fund for financing developers. We also have a department called Gender Department which is dedicated to financing women owned businesses.
Can you throw more light on the activities of the BDSPCs and the criteria for accessing loans from BOI?
BDSPs are Business Development Service Providers. They are accredited consultants of BoI. They are not agents of BoI. They are agents of potential customers. We have about 200 of them with locations all over the country. We encourage our SME customers to engage them to assist in preparing feasibility studies and packing of loan documents for purposes of accessing loans from BOI. We pay the BDSPs commission when their client’s loans are approved by BOI.
Who is Mr. Aranonu, tell us about your growing up?
Pastor Simon Aranonu was born on the 22nd of May 1961 to Augustine Ejidike Aranonu (late) and Mrs Theresa Nwoye Aranonu. I grew up in a rural area. I was born to illiterate parents. My late father was a petty trader.
It was a major challenge growing up because of poverty. I almost could not attend secondary school. An auntie mounted pressure on my father to send me to secondary school. My headmasters in primary school also appealed to my father who had already arranged for me to become an apprentice trader in 1974.
I attended a community secondary school. I ended up teaching in primary school for one year where I saved my one year salary. That savings along with my father’s meager income and the loans from my maternal uncle helped me attend university. Despite these challenges, I graduated as the best student in Finance in 1984.
I served in Benin, and later moved to Lagos where I lived with my brother between 1985 and 1987. I worked as an account manager in a Courier company in Ojuelegba and later worked in a trading company in Ilupeju, Lagos. In the course of one of my official duties, I met an old schoolmate who told me of a casual/ contract job in the then Continental Merchant Bank. With the assistance of a relative who worked in the then Continental Merchant bank, I was invited for an interview and ultimately engaged as contract employee for six months. I took a big risk. I accepted a pay cut and a casual job in place of a full-time job. This marked my entry into banking in 1987. At the end of the six months, I was converted into a full-time employee. Little did I know that my journey into banking would start that day.
How do you relax?
I watch football, especially the English Premier League, and I gist with my wife a lot.
What is your final word?
Your background has no relationship with where God is taking you. I believe in God. I believe God rules in the affairs of men. I believe God can take anybody from the valley to the mountain top. I believe however, that you must accomplish “3Hs” to be elevated to the top: Hard work, holiness and humility. I believe this strongly. I have preached it to young people for years. I also believe in the God of a second chance. As long as you are hardworking, holy and humble, God will always make a way. I believe there is no short cut to success. I believe sustainable success must be rooted in hard work and integrity. Ii believe that as long as your hands are clean and you are hardworking, you may fall, but God will lift you up again. The fall of a righteous man is never final. I believe hard work does not kill. I believe young people should work very hard for them to enjoy middle age and old age. I believe in Nigeria and its potentials.
