10 Functions of Nigeria Bank of Industry

The Nigeria Bank of Industry was established with a purpose, a unique purpose which was targeted towards promoting the industrial sector of the Nigeria’s economy.

The bank of industry was actually set up with a view to ensure that industrial production is encouraged, as well as, and value creation.

This was to make possible by the manufacturing and processing activities of businesses within the country through the assistant of the Nigeria Bank of industry.

The primary aims of setting up the Nigeria Bank of industry was to make financial provision for the industrial sector of the economy, including business support services.

The focus was to target sub-sectors, such as, agricultural businesses, and agro-allied businesses, and Solid minerals businesses, and oil / gas businesses, and manufacturing businesses.

Other businesses that were to be financed by the Nigeria Bank of industry were those businesses that involved in value chains production.

What Is Bank Of Industry?

Bank of industry is a commercial and/or development bank, established to assist businesses that are into manufacturing and processing financially. Since its mandate is targeted towards the industrial sector of the economy, the Nigeria Bank of industry is saddled with the responsibility of financing equipment used in value chain production.

Functions Of The Nigeria Bank Of Industry

There are a number of functions carried out by the Nigeria Bank of industry, in this article I am going to explain quite a number of them.

1. It Finances Plant And Equipment

The Bank of Industry main objective is to promote industrial sector of the economy, in doing so, it is targeted at financing plants and equipment only.

Financing raw materials and working capital of businesses are not in its financing preferences, lest alone financing lands and buildings.

One of the core mandate of the bank of industry is primarily, that of financing industrial equipment. For instance, if someone is into agriculture business, area of financial assistant from the Nigeria Bank of industry would be that of equipment, therefore,  the equipment that agriculture business would need for the production of its goods would be what the Nigeria Bank of industry would financed. In this case, it could be some farm or agriculture equipment, such as, tractors, and combine harvesters, and dryers, and freezers, and other such agriculture machineries.

2. It Disburses Funds To The Suppliers Of Equipment

Another function of the Bank of Industry is that, in line with the equipment businesses require to carry out its production, the Nigeria Bank of industry would   disburse funds to the manufacturers or the suppliers of these equipment so as to supply businesses these equipment.

Since it is the bank of industry would finance the equipment in this context, it is therefore, incumbent on the Nigeria Bank of industry to make sure that proper finding is made, and the Bank has to ensure that all documents from the suppliers are vetted in order to prove the genuineness of the quotations and the equipment.

It is also incumbent on the bank of industry to make sure that the prices tag of these equipment are  reasonable, not that the Bank of industry want to finance lower quotation, no, the reason for proper verification by the Bank of industry is to ensure that whatever equipment they purchase worth the value for the money.

In most cases, the Bank of industry will encouraged businesses to first fine out whether there are locally made equipment, and where this become possible, then the assurance is that, there will be availability of locally made spare parts and support maintenance, and prices of equipment would be cheaper.

3. It Helps Businesses Source For Working Capital Requirements

One of the functions of the Bank of industry is that, it do assist businesses in sourcing for their working Capital requirements, and this is done through organizations who partners with the Bank of industry.

Like I said earlier, it is not the duties of the Bank of industry to finance working capital, but since the Bank of industry has gotten a network of partners, which of course, are other financial institutions, so what the Bank of industry does is to enter into a negotiation terms with these banks, the terms has to do with small and medium scale enterprise financing.

Therefore, in such situation, since the Bank of industry only finance equipment, when businesses apply for equipment financing, any business that would want the Bank of industry to help source for its working capital can also apply along side with the application for equipment financing to the Bank of Industry, and because the Bank of industry is surrounded by a network of participating banks, the two loans would be provided.

By that I mean, loan for equipment and loan for working capital, but with different terms.

4. Provides Business Support

The Nigeria Bank of industry is saddled with the responsibility of financing equipment used in value chain production. This is true, but besides provision of funds,the Nigeria Bank of industry is ready to give businesses the necessary support they may desire.

The functions of the Nigeria Bank of Industry is not just limited to providing finance to businesses. The Bank also take interest in ensuring that businesses succeed through its support.

The Bank of industry’s assistant or support in ensuing businesses succeed  starts from the very time, it is willing to ensure that businesses that applied for loans, access these loans at when due.

It does not just stop there, the Bank of industry will go as far as, ensuring that products do not struggle for sales, it will ensure that businesses make sales, generate profits so as meet their businesses goals and as well, pay back their loans.

The Bank of industry has achieved this through Business Development Support Providers. It believes that through Business Development Support Providers, every borrower would be assisted and supported through out the life circle of their businesses.

Related: The Impacts of Banking Industry on Nigeria’s Economy

Conclusion 

The primary aims of setting up the Nigeria Bank of industry was to make financial provision for the industrial sector of the economy, including business support services.

The focus was to target sub-sectors, such as, agricultural businesses, and agro-allied businesses, and Solid minerals businesses, and oil / gas businesses, and manufacturing businesses.

Other businesses that were to be financed by the Nigeria Bank of industry were those businesses that involved in value chains production.

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