BoI/Aliko Dangote Foundation Fund For SMEs: Eligibility And Requirements

Are you a micro, small, and medium-sized business into manufacturing, Agro-processing, and merchandising of commodities made entirely in Nigeria? Have you been looking to source for funds to grow your business? Worry no more because we’ve got you covered with the vital information contained in this article.

About BoI/Aliko Dangote Foundation Fund

BoI/Aliko Dangote Foundation Fund was designed to assist Nigerian micro, small, and medium-sized businesses engaged in manufacturing, agro-processing, and merchandising of commodities made entirely in Nigeria. In this article, we will tell you all you need to know about the fund, including eligibility, requirements and how to apply for the fund.

Eligibility Criteria

  • Duly registered Limited Liability Companies, Enterprises or Cooperatives.

Loan Requirements

Cooperative Societies (Loan Amount Up to ₦10 million)

  • Joint and several guarantees of the beneficiary members of the Cooperative society” Cross guarantee of members of cooperative (cluster) Society.
  • Personal guarantees of the President and Secretary of the Cooperative Society.
  • Two (2) external guarantors acceptable to BOI.
  • 10% of the security deposit.
  • Lien over the stock of trade (present and future).
  • Asset debenture on Equipment finance.

Enterprises/Limited Liability Companies (Loan Amount Up to ₦10 million)

  • Asset debenture over the equipment financed.
  • Irrevocable Personal Guarantee of the Chief Promoter of the company (For Limited Liability Companies).
  • Moveable Collateral Registry.
  • Insurance of Assets with BOI noted as the first loss payee.
  • Two (2) external guarantors acceptable to BOI who must belong to any of the following categories:
    • Senior Civil Servant (Level 12 and above) who should not be more than 53 years old or not more than 28 years in service (whichever comes first.
    • Bankers (not below the level of (Assistant Manager) and must have been confirmed by current employer.
    • Professionals i.e. Medical Doctors, Lawyers, Accountants, Engineers, etc.
    • Senior Staff (not less than a manager) of reputable quoted Companies, International Oil Companies, Telecommunications Companies (GSM providers).
    • Other external guarantors including industry players that are acceptable to BOI with reasonably sizeable net worth in comparison to the loan amount.

The guarantees must be supported with Notarized Statement of Net worth acceptable to BOI.

Enterprises/Limited Liability Companies (Loan Amount >₦10 million ≤ ₦200 million)

  • Legal mortgage on pledged property or
  • Bank Guarantee from Commercial Banks acceptable to BOI.
  • Irrevocable Personal Guarantee of the Chief Promoter of the company, or
  • All assets debenture.

Loan Documentation Required

Customers are required to open an account with the Bank of Industry before application can commence. The documents needed for an account to be opened are listed below. A customer identification number will be created at the end of the account opening process.

An account can be opened by completing an account opening form and submitting all the required documents:

Account Opening Requirement List

  • Schedule of the shareholders signed by the company secretary. (Shareholders Register) for new customers and a confirmation of earlier submission for returning customers
  • Full Incorporation Documents:
    • Photocopy of Certificate of Incorporation
    • Certified true copy of Memorandum and Articles of Association
    • Forms CAC 2.5 (Allotment of Shares)
    • CAC 2.3 (Particulars of Directors)
    • CAC 2.1 (Appointment of Company Secretary)
  • Means of identification of all Directors of the company (i.e., photocopy of International Passport/Driver’s License and National Identity Card) and BVN of the Executive Directors. (**note that ID of all Directors are needed for compliance and credit search)

The loan application process will begin after the account is opened. A loan application form is required to be completed and all required documents submitted and verified:

Loan Application / Approval Requirement List

  • Formal Loan Application on Letterhead
  • Duly completed Loan Application Form
  • Feasibility Study Report on the project to be financed stating write-up on technology and manufacturing process(s), etc.
  • Quotation/Proforma Invoice for the supply of items of Machinery and Equipment. Sources and quotations for Raw Materials expressed in quantity and amount
  • Security: Bank Guarantee, a letter of intent for Bank Guarantee (with Risk Management being part of the authorized signatories) of the commercial bank issuing the guarantee. Any exception should be supported with the Bank’s approval limits OR
    • Legal Mortgage
    • Photocopy of the title document(s) to the property being pledged e.g Statutory Certificate of Occupancy/Deed of Assignment/Conveyance/Deed of sublease
    • Valuation Report on the Property Proposed as Security from BOI’s accredited value
    • Lease agreement, if operating from a rented premises
  • A copy of the draft Technical, Management, Machinery Supply and/or Joint Venture Agreement (where applicable)
  • Three years’ Audited Financial Accounts and most recent Management Account from a BOI accredited auditors (for an existing business) OR Statement of Affairs (for business less than one (1) year)
  • Company’s Bank Statement for a period of one (1) year
    • The output of the process is the offer letter
    • Two options are proposed for this stage as shown below
  • Regulatory approvals e.g NAFDAC certificate, Mining Lease
  • Declaration of Outstanding Liabilities to other Institutions and/or Individual

If a loan a loan is approved, the next and that last part of the process is disbursement. Before disbursement can begin, the documents below must be submitted:

Loan Availment / Disbursement Requirement List

To be provided by the customer:

  • Submission of Letter of Offer duly endorsed by a Director and Company Secretary or two (2) Directors
  • Letter of acceptance of Offer and Letter showing specimen signature of the authorized signatory
  • Board Resolution authorizing borrowing
  • Return of duly executed Loan Agreement
  • Evidence of payment of fees (if applicable – appraisal, commitment and legal fees)
  • Letter of Attestation
  • Original proforma invoice(s) for the approved item
  • Four (4) Passport photographs of the Chief Promoter and a Director
  • Evidence of filing of Annual Returns, as well as tax clearance certificate -TCC- for the Company, the Chief Promoter and Directors of the Company. Evidence of payment (eTCC) should be accepted for deferral
  • Submission of Bank Guarantee or title documents/other legal documents e.g. Statutory Certificate of Occupancy of the pledged property, ground rent receipts etc.
  • Letter of undertaking to pay interest during moratorium

Features

  • Single Obligor Limit: ₦50 million
  • Tenor: 3-5 years
  • Moratorium: 6–12 Months
  • Pricing/Charges: Interest Rate: 5% p.a., Processing Fee: 1% (one off), Legal Fee: Statutory Fees: Payable to Government Agencies (Stamp Duties, Registration Fees, CAC Filing fees, etc.) – These fees are dependent on the security arrangement, loan value and location of security, Professional legal fees: Dependent on loan value.

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