BoI MD calls for special funding for DFIs

The Managing Director, Bank of Industry (BoI), Olukayode Pitan, has advocated specialised funding to help the country actualise its growth blueprint.

He spoke at the third Association of Nigerian Development Finance Institutions’ Annual General Assembly in Abuja.

Pitan, who is also the Chairman, Association of Nigerian Development Finance Institutions (DFIs), said as the country strives to achieve sustainable development goals and address global challenges, the traditional financing models become inadequate.

If the government is to drive sustainable industrialisation and inclusive transformation, he indicated that utilising specialised funding arrangements complemented by non-financial services’ DFIs could act as growth catalysts to development.

He noted that challenges such as specific market failures and institutional barriers have prevented private investment from flowing to developing countries because of asset deterioration, weak corporate governance and risk management frameworks.

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Highlighting the importance of international cooperation and solidarity in advancing innovative financing for developmental impacts, Pitan noted that developed countries could support developing countries by providing resources, technology transfer, and capacity building and it is for multilateral institutions therefore, have a critical role to play in coordinating efforts, mobilising resources and ensuring the effective implementation of innovative financing mechanisms.

“Therefore, we must continuously work together, leveraging on our expertise, resources, and networks to unlock transformative projects by working in synergy with the organized private sector and our respective Governments,” he stressed.

Using the Bank of Industry as an example, he recalled that over the years, the bank has successfully raised funds from the international capital market, which has allowed it to not only fill critical gaps and provide the necessary funding for transformative projects, but also exposed it to global best practices and innovative solutions that promote institutional development, and improve the effectiveness of developmental initiatives.

He said, “Since the Bank of Industry commenced its innovative financing mechanism, the total assets have grown significantly by 381% between 2017 and 2023 (H1), reaching N2.38 trillion by the end of year 2022 and closing at N3.29 trillion as at June 2023.

“The equity position has grown by 188% from N220 billion in 2017 to N634 billion in 2023 (H1). The creation of quality risk assets has helped the bank to maintain a non-performing loan (NPL) rate of about 2% as at 2023 (H1). This falls below the regulatory threshold of 5%. The bank maintains a strong corporate governance structure, its accounts are audited by one of the big 4 firms and it is rated by international and local rating agencies i.e. Fitch, Moody’s & Agusto & Co.”.

He advocated the exchange of technical expertise between DFIs members and similar organizations globally, prioritizing professional advancement.