The Bank of Industry and businesses in Nigeria
How exactly do businesses affect the overall condition of any nation? What measures are governments and capacity-building institutions putting in place to help businesses in Africa and other developing nations or otherwise? Studies and polls conducted show that micro, small, medium and large-scale businesses have a significant impact on the economic development of any nation.
Micro, small and medium enterprises (MSMEs) constitute a majority of most economies of the world. Reports from the World Bank show that formal and informal SMEs create more than 60% jobs and a greater percentage of over 40% of the GDP in emerging economies. These numbers are significantly higher when informal SMEs are included. From their proper use and deployment of locally sourced raw materials, provision of employment, generation and use of locally sourced capital and investments to the training of local manpower; the list is indeed endless. Majority of developed and developing countries need the viability and resourcefulness of these business enterprises to create and sustain their paced economic growth process.
Nigeria is no different. As a developing nation, the impact of these business enterprises cannot be over-emphasized. The average Nigerian has an indefatigable entrepreneurial spirit, which surmounts all odds and seemingly thrives even in our characteristic environment. Over time, these businesses seem to have lost faith in getting assistance from the government of the day. However, there now seems to be a bridge between the flailing gap in the provision of resources and institutions to improve the business terrain and ease of doing business in the country.
With the emergence of institutions like the Bank of Industry (BoI) formed from the merger between Nigeria Industrial Development Bank (NIDB) and Nigerian Bank for Commerce and Industry (NBCI), we can gladly say some form of reprieve is here to stay.
BoI was created in 2001 to transform the industrial sector in Nigeria by providing business support services to Nigerian businesses and projects as well as providing financial aid and business process improvement for the establishment, expansion, diversification, and industrialization of micro, small medium and large business enterprises.
In turn, these business enterprises will then create more jobs and value for citizens of the country, improve the socio-economic conditions and alleviate the poverty level of Nigeria in the long run. There are provisions for small, medium and large enterprises operating in sectors like Agriculture & Agro-Processing, Creative & Cultural Industries, Engineering & Technology, Energy, Gas & Petrochemicals, Mining and Solid Minerals, and many others.
Creative industries of nations like Nigeria boost overall productivity as they explore potentials that enhance the economic well-being of such nations as well as their human creativity. Human effort, after all, is the most important economic resource needed for any production endeavour. Business enterprises within the creative industry include arts, design, performing arts, fashion, television & radio, film-making, advertising, music etc.
BoI has been very instrumental in growing the creative industry particularly the film industry in Nigeria popularly known as Nollywood, the 3rd largest entertainment industry in the world. The NollyFund, worth N1 billion is a special product that was created for Nollywood, especially limited liability companies and enterprises engaged in film production. The fund is being used for the film production value chain and has been estimated to create a minimum of 2,000 direct and 5,000 indirect jobs.
Film-makers like Joke Silva and Kunle Afolayan with companies Lufodo Productions and Golden Effects Limited respectively, have benefitted from the financial aid, to create movies and productions that have drawn positive attention to Nigeria and increased economic growth in related markets and businesses.
Kunle Afolayan shared in an interview that he accessed the Nollyfund for his movie; the CEO after obtaining some information about the product and realized his company needed certain documentation and structure, which was in place to qualify for the loan. All requirements were met and the fund was partly used to make the movie. He stated that the advantages of the BoI product were that the loan was collateralized with the product; his movie, the bank makes sure that the funds are deployed for the specific reason it was obtained for, and the interest rate is moderate in comparison to offerings by commercial banks.
“The impact of the Nollyfund on the film industry and Nigeria is enormous as there are various people looking for funding for their productions. If you are a film-maker that wants to make a movie, I would recommend the fund as it makes you think not only as an artist but as an entrepreneur. The more people can access the fund, the more jobs are created as film-making has several departments like catering, carpentry, sound etc. that will yield earnings for everyone involved”, he said.
Formidable thespian and producer, Joke Silva also expressed her sincere appreciation for the timely financial intervention BoI provided. In an interview she granted, she shared that Lufodo productions, her company, was selected in 2012 for the curation of the Nigerian Cultural Expressions at the 2012 Olympics where they presented 3 full length plays (Wole Soyinka’s The Lion and the Jewel, Fred Agbeyegbe’s The King must dance naked and Sefi Atta’s A Naming Ceremony), a mini film festival as well as a mini poetry festival.
They had always been in conversations about the type of funding that was needed in the entertainment industry and a couple of years later, BoI came through for her company when it had to overcome a financial hump by offering a long-term collateralized loan with attractive interest rates that were unmatchable by other commercial banks in Nigeria. The funds were timely and due to the support and good relationship they enjoyed from the bank, thecompany was able to pay back the loan.
She further added that the loan provisions have been impactful to many other practitioners in the entertainment industry. The structure of Nollywood has been formalized by studio creations and there is adequate support in production and infrastructure. Cinema houses, for example, have expanded and built more cinemas while film producers as well are making more films. It is phenomenal and commercial banks are replicating the model, although they have been unable to beat the low-interest rates offered by BoI.