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“INTERVENTION FUNDS: THEJOURNEY SO FAR”
PRESENTEDBY
MR. WAHEEDOLAGUNJU
THEACTING MANAGING DIRECTOR/CEO.
BANKOFINDUSTRY LIMITED
ATTHE
FINANCIALSERVICES GROUP’S SEMINAR
ORGANIZEDBY THELAGOS CHAMBEROFCOMMERCE&
INDUSTRY (LCCI)
APRL17, 2014

BACKGROUND
• Prolonged economic recession occasioned by the collapse of
the world oil market from the early 1980 and the attendant
sharp fall in foreign exchange earnings have adversely affected
economic growth and development in Nigeria. These and other
factors have resulted in fallen incomes and devalued standard
of living amongst Nigerians
• Experience has shown that industrial development in any
country provides the brightest hope for sustained growth,
employment generation, improved savings and investments
and indeed, economic development. There is no gainsaying
that industrialization determines the dividing line between
economically developed and the developing nations. Nigeria
now ranks very low on welfare scale. We have gradually slid
from a position in which Nigerians enjoyed higher standard of
living in the 1960s to a position where we now compete at the
lower rung of the ladder of less developed nations.
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BACKGROUND CONT’D
• The Nigerian Industrial Sector which is the primary domain of BOI, is
faced by myriads of challenges and problems which have greatly
affected the pace of industrialization in the country and subsequently
economic growth and development.
• Based on the above, the Federal Government of Nigeria has tried to
intervene over the years in certain sectors of the economy to accelerate
the pace of industrialization and subsequently economic development.
• The intervention processes have been done by the Federal Government
using funds, policies or generally through providing enabling
environment.
• The various interventions are done through the use of its agencies such
as Central Bank of Nigeria, Bank of Industry, Bank of Agriculture,
NEXIM, SMEDAN amongst other MDAs. 3

THE ROLE OF BANK OF INDUSTRY
• Established in October, 2001, BOI is largely a state owned DFI charged with the
responsibility of promoting the emergence of a virile industrial sector. In other
words, BOI was conceived to catalyze the transformation of the real sector.
• VISION
• Its vision is to be a leading self-sustaining Development Finance Institution,
operating under sound management and banking principles, that would promote
the emergence and development of a virile competitive industrial sector in
Nigeria.
• MISSION
• BOI’s mission is to transform Nigeria’s industrial sector and integrate it into the
global economy by providing financial and business support services to existing
and new industries to attain modern capabilities to produce goods that are
competitive in both domestic and external markets.
• MANDATE
• Providing financial assistance for establishment of large, medium and small
enterprises; as well as expansion, diversification and modernization of existing
enterprises and rehabilitation of ailing industries
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BANK OF INDUSTRY AND
INTERVENTION FUNDS
• The Bank of Industry Ltd is currently the Fund Manager for some
intervention funds of the Federal Government of Nigeria. The
funds include:
• The N235 Billion CBN Intervention Fund for Refinancing and
Restructuring of Banks’ Loans to the Manufacturing Sector.
• The N300 Billion CBN Power and Airline Intervention Fund.
• The N100 Billion Cotton, Textile and Garment Fund
• The N18 Billion National Automotive Council (NAC) Fund
• The N10 Billion Rice Fund
• Other States’ Managed Funds/Agro-based Funds.
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CBN INTERVENTION FUNDS
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The Central Bank of Nigeria in a bid to unlock the credit market and improve
operational efficiency in the Nigerian economy invested in a N535 billion
Debenture Stock issued by the Bank of Industry (BOI) for on lending to the real
sector.
The N535 billion is made up of N300 billion for the power and aviation sectors
and N235 billion for the refinancing/restructuring of banks’ existing loan
portfolios to the manufacturing sector.
Fund Purpose:
•Improving access to credit to manufacturers
•Improving the financial position of the Participating Banks (PBs)
•Increasing output
•Generating employment
•Diversifying the revenue base
•Increasing foreign exchange earnings and
•Providing inputs for the industrial sector on a sustainable basis.

CBN INTERVENTION FUNDS (Cont’d)
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Features of the Facilities
•Refinancing of existing loans, leases and resuscitation of ailing industries;
•Long term loan for acquisition of plant and machinery
•Working capital
• All inclusive Interest rate of 7% per annum as against 15% or more being
charged by the Commercial Banks
•Tenor of the loan is up to 15 years as against 1- 3 years by Commercial Banks.
Commercial Banks loan are short termed and not suitable for financing long
term
assets.
• Eligible pledged securities by the PBs – TBs / Bonds, ISPO and other securities
acceptable to the CBN.

The N300 Billion CBN Power and Airline
Intervention Fund
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Challenges faced by Airlines and inconsistent power supply such as the under
listed necessitated the bail out Fund:
 Heavy debt burden of airline operators with commercial banks due to high cost
of fund in the acquisition of operating assets. i.e. Fund mismatch – using short
term loan to finance long term assets.
 High operational costs including finance charges incurred by airline operators
due to increase in various taxes and price of aviation fuel.
 poor living standard of the citizens through inconsistent power supply;
Without the intervention , the aviation sector would have become comatose with
obvious risk of considerable job loss and far reaching negative impact on the
economy.
Breakdown of Disbursement in terms of sector is as follows:.
Sector Number of
projects
Amount (Million
Naira)
Power 32 115,700
Airline 17 117,000

The N235 Billion CBN for Restructuring /
Refinancing of Manufacturing /SME
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Challenges faced by manufacturing/SME sector such as the under listed necessitated the bail
out Fund:
 Heavy debt burden of manufacturers to commercial banks due to high cost of fund in
the acquisition of operating assets. i.e. Fund mismatch – using short term loan to
finance long term assets.
 Less than 30% industrial capacity utilization resulting from lack of power supply.
 Dependant on high import with the associated foreign exchange risk.
 Inability to compete in the global market place due to high cost of production.
With the intervention, more than 500 projects benefitted from the Fund with the following
status:
•Projects in operation improved on their capacity utilisation by about 20% and continue to
sustain their operation after the intervention.
•Uncompleted projects numbering 10 were able to get completed and commence operation
thereafter.
•Five (5) stalled projects under implementation were completed and now operational.
•Turnover increased from N605.7 Billion to N760.7 after the intervention.

The N100 Billion Cotton, Textile and Garment
Fund
• The Federal Government, on June 10, 2009 approved and authorised the Debt
Management Office (DMO) to issue a long-term low coupon rate of N100 billion
Bond in tranches for the provision of funds to BOI for on-lending to businesses
under the Cotton, Textile and Garment (CTG) value-chain. The loan facility was
recently converted to equity by the FGN.
• The Fund is meant for resuscitating existing CTG projects as well as for new
entrants in the CTG value chain.
• The interest rate is 6% per annum with a tenor of up 10 years
• As at December 31, 2013, Seventy seven (77) applications amounting to N58.603
billion have been approved, out of which N51.326 billion was disbursed to sixty
(60) projects since the inception of the CTG scheme.
Breakdown of approvals in terms of sector:
Sector Number
Garment 27
Textiles 32
Cotton Growing & Ginning 17
CTG Support Services (LPFO) 1 10

The N100 Billion Cotton, Textile and Garment
Fund (Contd)
• An independent review of the implementation of the scheme was carried out
by Fairways Resources Enterprises Ltd in collaboration with UNIDO and
their findings are summarized below:
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No. Parameter Before
Interventio
n
After
Intervention
1 Capacity Utilization Under 40% About
61.16%
2 Job creations & saving 8,070 11,500
3 Increase in Machinery /
Equipment (%)
- 68%
4 Increase in Working Capital (%) - 160%
5 Increase in Average Annual
Turnover (%)
- 32.03%
6 Increase in Average Wages &
Salaries
- 24%

The N18 Billion National Automotive Council
(NAC) Fund
• In pursuance of its mandate and responsibilities, the National Automotive Council
(NAC) set up a fund known as the “NAC-AD Fund” (or National Automotive
Development Fund) vide the Managed Fund Agreement of 12th
March, 2004 with
which it also appointed BOI as the Fund Manager. The NAC-AD Fund aims to
achieve the development of the automotive industry sub-sector of the Nigerian
economy.
• The seed money originated from the two percent levy on all imported vehicles,
auto-components, spare parts and raw materials brought in for the automotive sub-
sector.
• Since inception of the Fund, a sum of N18,097,696,875.87 has been received from
NAC and the size of the portfolio of projects currently being managed by BOI is
about N8,513,756,270.55 (revolving).
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The N18 Billion National Automotive Council
(NAC) Fund Cont’d
• NAC in conjunction with BOI has also embarked on the establishment of six (6)
proto-type Mechatronics Centers which have been equipped by NAC from the
NAC-ADFund for capacity building of Auto-technicians in order to improve their
skills in handling modern diagnostic equipment to carry out routine servicing and
maintenance of new generation vehicles.
• The centers are Lagos State Polytechnic, Ikorodu; Rivers State Polytechnic, Bori;
Kaduna Polytechnic, Kaduna; Metallurgical Training Institute, Onitsha; Federal
College of Education, Gombe and Federal Science and Technical College, Orozo,
Abuja.
• Collaboration is also in place with reputable MFBs for on-lending to auto –
technicians to enable them acquire simple modern tools while a portion of the loan
is being deployed through DMB/ Other financial institutions for procurement of
locally assembled vehicles.
• NAC facility is currently being provided at 7.50% interest rate for term loan and
10% for working capital loan. 13

The N18 Billion National Automotive Council
(NAC) Fund Cont’d
Break-down of Approvals in terms of Sector:
Sector Number
Vehicle assembly 8
Cycle/ two/three wheelers 12
Components manufacture 24
No of participating MFBs for On-lending to Auto-technicians 17
No of participating DMBs for Vehicle Purchase Scheme 8
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The N10 Billion Rice Fund
• The Federal Executive Council (FEC) formally approved the setting up of a Ten Billion
Naira (N10 Billion) Rice Processing Intervention Fund in May 2009.
• The Fund was designed as a credit scheme to ten initially pre-qualified companies to set
up 17 Model Rice Processing Mills in the country. The estimated cost of each mill is
N1.4 billion, which is to be financed 40% by the Federal Government’s Rice Fund credit
facility and 60% by the beneficiary companies/commercial banks.
• The credit facility, which is mainly to finance plant and machinery and associated costs,
is for a tenor of twenty (20) years with five (5) years moratorium at an interest rate of
4% per annum.
• Six out of the ten applications that were able to meet the FGN / BOI requirement have
been approved by BOI for a total sum of N5.040 billion.
• Recently, however, the Federal Government came up with a new initiative in this
industry by setting up 100 Rice Mills to be located in the 36 States of the Federation.
Interested entrepreneurs/investors will thereafter be encouraged to take over these mills
in a PPP arrangement.
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Economic Development Focus of BOI:
Agribusiness
• Nigeria’s agro-economic transformation
requires shift from:-
– Primary to manufactured products
– Traditional technologies to modern technologies
and innovation
– Comparative advantage to competitiveness
– Production to market orientation
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Support for FGN’s Strategy for
Transformation by BOI
• Create an enabling business environment
– Infrastructure and Energy
– Finance and services
– Technical assistance
• Promote and facilitate PPP
• Strengthen innovations system and
commercialize research findings
• Acquire and adapt new technologies
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Support for FGN’s Strategy for
Transformation by BOI
• For BOI, the value chain finance model is
being employed for the major crops covered by
the Bank (namely cotton and rice).
• To align with the FGN initiatives, the Bank is
also participating in developing value chains in
the cassava, cattle, tomatoes and palm oil.
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Case Studies & Experiences:
Cotton, Textile And Garment
(CTG) Fund
• Loan granted to National Cotton Association of Nigeria (NACOTAN), South West
Zone, for which 3,000 members benefitted, for cultivation and reactivation of an
existing Ginnery at Ibara-Orile, Abeokuta, Ogun State.
• The ginnery was leased by NACOTAN South West Zone Nigeria Limited and being
managed by the association’s executive composed of State Chapter Executives.
• Sprintex Ikorodu is the off-taker of the Ginnery products.
• The off-taker is providing fabric for the players in the Garmenting Sub-sector
• Collaboration with NACOTAN, North West Zone, Gusau, Zamfara State in Capacity
Building for Cotton Stakeholders and extension of cooperative micro credits for cotton
cultivation.
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Case Studies & Experiences:
RICE INITIATIVE
BOI supported a mega rice plant with a capacity to do 24,000 tonnes of rice /annum,
under the Rice Intervention Fund in Ebonyi State.
There are also numerous small scale rice millers within the state.
Also in collaboration with the Ebonyi State Government, the rice millers and UNIDO, BOI is
supporting the establishment of Abakaliki Power Plant Limited with the following initiatives:
 Intends to use rice husks from three (3) rice milling clusters in the state for bio-fuel
production.
 The current rice husk availability is estimated at more than 48,000 tonnes for the
generation of 5MW of power.
 Long term loan to be obtained through UBA under the CBN Intervention Fund while
the State Govt, Rice Millers and BOI are providing equity. UNIDO is assisting in
providing the Business Model and technology.
 The business model and technology have been tested in Asia and the 5MW project is
a pilot , which will be replicated in other Rice Clusters across the Federation.
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Case Studies & Experiences:
CBN INTERVENTION FUND
CENTRAL PACKAGING CO. LTD.
The company recently commissioned an Ultra Modern Hi-tech Packaging factory which
was hitherto a Federal Government Enterprise, managed by Nigeria Paper Mill.
In 2006, it was slated for privatization as a result of the near collapse of the enterprise.
Gobesh (West Africa) Ltd was declared the preferred bidder for 100% net asset acquisition
after a keenly contested bidding.
 With the Intervention fund through the support of CBN, BOI and Oceanic Bank (now
Ecobank), the company was turned around from its moribund status and it is now one of
the largest in the industry.
 The plant output is 120 metric tons on two shifts per day producing 600,000 cartons per
day.
 The company currently engages about 600 workers (skilled and unskilled).
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Case Studies & Experiences:
NAC FUND
INNOSONS NIGERIA LIMITED
 Engaged in motorcycle and vehicles assembly
 Started with production of most of the components locally
 Actively involved in local assembly and sale of motor vehicle
(staff buses, mass transit business)
 BOI worked with NAC to provide term loan for acquisition of
modern equipment and working capital for importing vehicle
components not produced locally.
 BOI is also providing vehicle purchase soft loans through
DMBs to facilitate adequate market for locally assembled
vehicles which Innosons is also a beneficiary.
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Value Chain Finance model being utilized
by BOI – Appendix 1
Input
Dealers
Producers/
Association
Processors/
Traders
Associations
Traders
Exporters
Market/
Consumers
Demand for financial services
Different financial requirements and services
TERM
• Medium
• Long
Financial Products and TA
• Venture Capital
• Credit lines
• Export finance
• Ware house receipt
• Insurance
• Etc. 23

Cotton Value Chain-Appendix 2
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Rice value chain -Appendix 3
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Cassava Value Chain – Appendix 4
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Cattle value chain- Appendix 5
Inputs Production
Processing
Distribution
Marketing
Feeds
Compounds
Breeding
Veterinary
Services
Calf to Cow
Fattening
Milk, Beef,
Butter, Cheese
Leather &
Products
Packaging
Supermarkets
Restaurants
Export
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Tomatoes Value chain –Appendix 6
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Palm Oil value chain- Appendix 7
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Palm Oil Value Chain
Farming Non-food uses
Cooking
Margarines and
spread
Deep Frying oil
Bakery fat
(Shortening)
Cocoa butter
alternative fats
Confectionary fat
Ice cream fats
Infants nutrition
fats
Other food
applications
Cosmetics and
personal care
Candles
Lubricants and
grease
Pharmaceuticals
Surfactants
Industrial Chemicals
Agrochemicals
Coatings
Paints and lacquers
Electronics Leather
Biodiesel

THANK YOU
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