The MSME Distributor Finance Product is designed to provide working capital financing to microbusinesses for the acquisition and distribution of Made-in-Nigeria products and services through intermediary companies.
Eligibility Criteria
Intermediary companies must have the capability to manage the operations of retailers, wholesalers, retail chain stores, or microbusinesses using technology-driven platforms.
Initial Documentation Required
To apply, the following documents are needed:
- A formal loan application letter
- A completed loan application form
- Certificate of incorporation, along with the memorandum and articles of association (MEMART), Forms CA02 and CA07
- A detailed company profile
- Profiles of shareholders, directors, and the management team
- A license to distribute pharmaceutical products (for pharmaceutical distributors only)
- Audited financial statements for the past three years and the current management account
- Twelve months of bank account statements (from a minimum of two banks)
- Evidence of available loan security
- Any additional documents requested by the Bank of Industry (BOI)
Loan Documentation Required
Applicants must open an account with the Bank of Industry before starting the loan application process. The required documents for account opening include:
Account Opening Requirement List
- A schedule of 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 the Certificate of Incorporation
- Certified true copy of the 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 for all directors (e.g., photocopy of International Passport, Driver’s License, and National Identity Card) and BVN of the Executive Directors. (**Note: ID of all directors is necessary for compliance and credit search)
The loan application process will commence after the account is opened. The following documents are required for the loan application:
Loan Application / Approval Requirement List
- A formal loan application on company letterhead
- A duly completed loan application form
- A feasibility study report on the project to be financed, including details on technology and manufacturing processes
- Quotation/proforma invoice for the supply of machinery and equipment, as well as sources and quotations for raw materials with quantities and amounts
- Security Options:
- Bank Guarantee, or a letter of intent for a Bank Guarantee (with Risk Management as part of the authorized signatories) from the commercial bank issuing the guarantee. Any exceptions should be supported by the bank’s approval limits.
- Legal Mortgage, including photocopies of title documents for the property being pledged (e.g., Statutory Certificate of Occupancy, Deed of Assignment, Conveyance, or Deed of Sublease)
- A valuation report on the property proposed as security from BOI-accredited valuers
- Lease agreement if operating from rented premises
- A copy of the draft Technical, Management, Machinery Supply, and/or Joint Venture Agreement (where applicable)
- Three years of audited financial accounts and the most recent management account from BOI-accredited auditors (for existing businesses) or a Statement of Affairs (for businesses less than one year old)
- Company bank statement for one year
The output of this process will be an offer letter.
Additional Requirements
- Regulatory approvals (e.g., NAFDAC certificate, Mining Lease)
- Declaration of outstanding liabilities to other institutions and/or individuals
If a loan is approved, the final step is disbursement. Before disbursement can begin, the following documents must be submitted:
Loan Availment / Disbursement Requirement List
To be provided by the customer:
- Submission of the letter of offer duly endorsed by a director and the company secretary or two directors
- Letter of acceptance of the offer and a letter showing the specimen signature of the authorized signatory
- Board resolution authorizing borrowing
- Return of the duly executed loan agreement
- Evidence of payment of applicable fees (e.g., appraisal, commitment, and legal fees)
- Letter of attestation
- Original proforma invoice(s) for the approved items
- Four passport photographs of the Chief Promoter and a director
- Evidence of filing annual returns and a tax clearance certificate (TCC) for the company, the Chief Promoter, and the directors. Evidence of payment (eTCC) should be accepted for deferral
- Submission of a 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 the moratorium
Features
- Loan Amount: Up to ₦2 billion
- Tenor: Maximum of 24 months
- Moratorium: 3 months
- Pricing/Charges:
- Interest Rate: 12% per annum
- Processing Fee: 1%
- Commitment Fee: 1%
- Monitoring Fee: 1% of the outstanding loan balance
- Security: Acceptable security instruments include any or a combination of the following:
- Bank Guarantee of 110% of the principal and interest
- FGN Bonds & Treasury Bills of 110% of the loan amount
- Legal Mortgage valued at 250% of the loan amount (Legal Mortgage applies only to loan requests below ₦500 million)