Experts from the Bank of Industry, have made revelations of how the South East can be better developed, at the BOI – South East Customer Engagement Forum 2017, held at the Beautiful Gate Hotels, Awka.

Bank of industry,Nigeria

At the event, Mr chike Nwaebe, MD/CEO, Renewal Consulting, spoke on the challenges faced by MSME and way out, an empirical analysis of South East Nigeria MSME’s.

According to him, ‘MSME’s has not received political support. If government in South East region can just provide needed support – our SME’s would have been thriving. How to promote MSME, Government don’t allow public servants to know the importance of MSME. South East governments encourage oppressive high cost of operating leverage: things you need to do before you start a business, i.e. power, diesel, foreign exchange, logistics – bad roads, e.g. a pure water tanker gets spoilt because of bad roads, money from profit is used to repair it?

‘Some MSME get into business because they have seen 6 other people succeed’ reveals Mr Nwaebe. ‘He will not study the business, the need etc. Business don’t thrive like that, as soon as he is going into the business, he is also going out. I thank BOI, a very strategic intervention agency with world standard and thinking out of box – that’s why we have this forum. Credit risk appraisal is lacking in most banks, no experience, experts think and act like one cap fits all – if not, they wont accept to give loan, so lots of people are discouraged’.

He called on the South East governments to improve the ease of doing business, which at the moment is unfriendly, poor, not good enough, and second to last, if not last in all the regions. There must be deliberate action by governments of South East to integrate the economy. Incentisize an entrepreneurial culture, so everyone from crèche know what talent God has given him. There is illiteracy in our MSME owners, extra-moral programmes for those who don’t have experience should be organized by South East States. They should constructively engage the Bank of Industry. Legislators from the South East should take 30% of their constituency funds and collaborate with BOI and lend these funds to people. It will create employment. They should develop financial institutions, beneficiary of loans to do training first, succession plans necessary or business will die.

The financial expert challenged the South East governments to take 30% of security vote and use it to support industry – if they do so, he concludes, insecurity, crime would reduce drastically and the South East region would become in 10 years, a full employment economy, self sufficient in food.

On his own part, the Senior Special Adviser to Governor Willie Obiano of Anambra State, Hon. Ernest Nnaemka Nnoruka, who represented the Governor recalled how Anambra State has provided security to enhance business and industrial growth in the State, created ASBA to support entrepreneurship, encouraged cooperatives and agriculture leading to Anambra Rice.


A legal expert from BOI, Barr Austin Aikore who delivered a paper on Legal Documentation in Loan Administration and Perfection, challenges in the South East region, a State by State analysis, said “that to get a loan one needs security, i.e. land with C of O up to 25 years, updated ground rent and valuation from BOI accredited Valuer and the land must be in urban area, need board resolution and attestation. If using a rented premises, they must be evidence of lease for tenor of loan, lease for tenor not necessarily that you have paid for the lease for the number of years.

He said that to provide security for loan and obtaining of loan in U.S. is easy, in U.K. it take 24 hours to set a business loan and you don’t need any C of O. He blamed the current practice on laws of Nigeria, which is beyond the Bank to change.

Other forms of getting loan include mortgage of land, you need government permit, go through Federal Inland Revenue Service (FIRS) and Ministry of Lands to perfect it. If a company, you need also to involve the Corporate Affairs Commission (CAC).

Another form of getting loan is Debenture fixed on plant and machinery, which you will pledge both plant/machinery to Bank in exchange for money. It could be floating Debenture – whatever is there at time of default.

The challenges are many, according to the legal expert. ‘Cost of perfection in five South East States, registration in Enugu is N30,000.00 Anambra N10,000.00 Ebonyi N6,500.00 Consent fee, Anambra 1%, Imo N50,000.00 computer fee, application fee are also involved. It cost more to do business in Anambra than in Lagos. Lagos has 0.25% consent fee. Delta State form cost N10,000.00 registration fee N5,000.00 flat. In Enugu if you seek loan of N50 million filing fee is 1% of the amount, stamp duty, FIRS 1.5% Consent fee N500,000.00 miscellaneous N35,000.00 total N2.544 million. Ebonyi consent fee is 5% of amount you want to borrow. Imo consent fee N50,000.00 Anambra consent fee N1.5 million for N50 million of loan. In Abia is N275,000.00 in Delta is N15,000.00 and Ondo State N60,000.00 for N50 million loan consent fee.

In Anambra State, if you bring tax clearance from other State, Anambra will reject it. Although Anambra State officials present at the forum denied this, one participant revealed he paid tax in Enugu State and was made to pay the same tax in Anambra. The Anambra State officials said that they must have been given unverified or fake tax certificate hence need to pay tax again, but if it is genuine, the State would not you to pay tax again after paying in another State – tax in Anambra State, they said is automated, and they warned people not to pay tax at branches but come to Awka which is automated.

The expert condemned the practice in Anambra State where if some one wants to collect loan of N50 million they would tell 2 directors of the company to pay 1% of the loan value as income tax before government permit, consent, stamp and registration.

The CBN was commended for new collateral registration where machinery, computer, cars can be used as collateral. The South East Governors were advised to reduce bureaucracy and make consent to be signed by the Governor or Commissioner. The expert reveals that sometimes they don’t have to wait till the documents are perfected before loan is given, some loans have been given 3 years ago, still the documents are still in perfection stage.

Explaining more on guarantors, he stated types of guarantees to include individual guarantees – personal and company guarantee – corporate indemnity – if default in loan repayment, we go straight to the guarantor to collect the money. Bank guarantees means bank says give him the money if he defaults will pay you. Proceeds of business as a guarantee must be certainty and concrete.

He concluded that BOI takes ¼ of legal fees have BDSP, Business Development Service providers (consultants) and that perfection in all south East States is long, cumbersome, and tedious.

Another speaker, Mr Emenike, Permanent Secretary, Ministry of Industry and Finance, Anambra State, said that the State abolished some taxes and levies. Last year it quickened C of O process, it delegated issuance of C of O to Commissioner and it takes not more than on month to get C of O in Anambra State now. To promote industries, he pointed to the setting up of ANSIPA by Governor Willie Obiano.


Still speaking on the role of entrepreneuship development centres (EDC) in accelerating the growth of MSME in Nigeria, Dr Osita Aniemeka of south East entrepreneurial Development Center SEEDC revealed that he approached Anambra State 5 times to set up a Centre, but they said no. SEEDC is a CBN sponsored project for entrepreneurs who are given scholarship and has trained 35,000 entrepreneurs. Created 20,000 jobs. Participants must be high school leavers, holders of OND, post NYSC, post graduates or entrepreneurs.

The training is quarterly, 6 weeks in class, 6 weeks internship and 3 weeks business plan. Sterling Bank partners with SEEDC to give each applicant a loan of N3 million maximum, with 9% interest. YEDP Fund group loan of maximum N10 million. The training is held at Adada Hall, Nsukka, Nkwo Nnewi in Anambra (private centre), WTC Umuahia and by March 2019 at Okigwe. He said that recently 1,760 enrolled, 500 finished and only 200 wrote the Business Plan.


Princess Kowanna delivered her own paper, the Essence of Customer Service in a Development Finance Institution (DFI) – BOI Perspective.

During the forum, customers gave feedback, Mr Okoli Dan Chibueze, Permanent Secretary, Land, Anambra State, told BOI to sit up, he said that Ibo people like free access to money, if you make it difficult, they leave it.

Other participants reveal that the process of BOI importing machinery and installing for customers takes time as interests mount. Process of getting loan from BOI too long. They informed BOI that no land in Anambra State this is rural areas and hence should be accepted as collateral.

Okeke Dan told the BOI that no place land is not realizable in Anambra State.

Mr Obaro Osah, Regional Manager, South East of BOI, in an interview after the programme, said that they have taken note of all issues raised and what is important is how do we grow SME and our customers and create employment. Second challenge is to accelerate growth of business in Nigeria. We have consultants working with us, we align with best global practices, we are not rigid, but ready to mould businesses to perform best.

Also present were the General Manager (SME-South) Bank of Industry, Mr Abdul-Ganiyu Mohammed, Mr Monday Odjigada, State Manager, Anambra, Hon Cajetan Odoh, representative of Enugu State Governor, among others at the Forum. The guests were treated with food and drinks at the event.