BOI raises €1 billion for credit financing to MSMEs

The Bank of Industry (BOI) says it has raised €1 billion from the international capital market.

According to a statement released by the development finance institution, the funds would be used to support micro, small, medium and large enterprises with “affordable loans of medium to long-term tenor, alongside moratorium benefits”.

African Export-Import Bank, Credit Suisse, Rand Merchant Bank and Sumitomo Mitsui Banking Corporation were reported to be the joint mandated lead arrangers, underwriters and book runners of the syndicated medium-term facility.

The investors were said to include the lead arrangers, alongside 20 other international financial institutions.

BOI said it presented its information memorandum to an audience of 60 potential investors in London in December 2019.

The transaction was subsequently launched on January 15, 2020, with an initial size of €750 million. Upon closing on February 19, 2020, the deal was oversubscribed by 60%. The deal size was thereafter upsized to a sum of €1 billion.

This is the bank’s second fundraising transaction after it raised $750 million from a syndicate of 16 international banks.

“Of particular and special note is the support of the governor of the Central Bank of Nigeria and his committee of governors, which was crucial to the success of this transaction,” the bank said.

“The apex bank supported BOI throughout the entire process with technical advice and all approvals as required that saw this transaction through from inception to its conclusion.

“The central bank also provided BOI with 100% currency swap to mitigate the foreign exchange rate risk. The facility will be disbursed in naira at single digit interest rate to borrowers with bankable projects.”

BOI said it disbursed N234 billion to 10,145 enterprises, thus creating an estimated one million direct and indirect jobs in 2019.

Featured image: Kayode Pitan, BOI chief executive officer