The Nigerian Industrial Development Bank

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(Edited)

The Nigerian Industrial Development Bank

The NIDB was an offshoot of ICON which was originally British owned.
The reconstitution of ICON into NIDB in 1964 was as a result of cooperation between the World Bank group, the Nigerian Authorities and Private Investors. The Bank is charged with the responsibility of providing medium and long term finance to non-petroleum, mining and
industrial projects in Nigeria hence it provides the manufacturing sector
about 90% of its funds. NIDB started with an authorised capital of N4 million contributed by the Central Bank of Nigeria, International Finance Corporation 25% private foreign institutions and private Nigerian individuals. The original ICON shareholders subscribed 5 million preference shares. The authorised and paid up Capital of the Bank at present stands at N100 million, subscribed by the Federal Government, the Central Bank of Nigeria and private Nigerians in the ratio of 59, 49 and 1 percent respectively, Private Foreign Institutions (IFC and the foreign banks, First Bank, Union Bank and United Bank for Africa) were bought out following the 1977
indigenisation Decree.
The early days of lending pattern of NIDB followed the equity structure. At that time, out of 12 loans granted by ICON'before it was transformed into NIDB, 9 were to foreign owned companies, largely
Indian and U.K. Textile Companies. NIDB invested in 52 projects between 1964 and 1966. Of the 52 projects, 33 went to foreign controlled companies and 19 went to Nigerians. However, as a result of the
indigenisation Decree, the bank's lending pattern changed in favour of Nigerian business concerns.
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The Bank's lending spread over various manufacturing subsectors of the economy including Textiles, Food and Beverages, Wood products, Chemical products, Metal products, non metalic mineral products and hotel products. The emphasis on the various industries changed from time
to time according to circumstances,
The NIDB relies heavily on government funds. One would expect a situation whereby NIDB would depend heavily on market funds in order to facilitate greater discipline in the management of resources, and promote faster growth.
Following indigenisation, NIDB had to review a number of its operating policies. For example, the policy of not investing in government controlled projects was amended to enable the bank undertake joint financing with the government. The scope of thegovernment's portfolio was also broadened to include projects with a low capital requirement of only N10,000 to allow for wider distribution.
The bank at present is complementing the indiginisation effort by granting at least 80 percent of its loans to Nigerian controlled enterprises.



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