BOI backs Transcorp Hotels with N22.75bn at 10% rate but manufacturers, SMEs struggle for credit

THE Bank of Industry says its core mandate is to facilitate the transformation of Nigeria’s industrial sector by “providing financial and advisory support for establishing large, medium, and small enterprises and expanding, diversifying, rehabilitating, and modernising existing enterprises.” However, at a time when manufacturers and small businesses were struggling to access credit, the bank approved a N22.75 billion facility for Transcorp Hotels, a move that raises questions about alignment with its industrial development objectives.

According to Economy Post‘s findings, BOI extended N10 billion to Transcorp Hotels at 10 percent interest rate in 2020 to upgrade the hotel rooms, kitchen, public area and equip a new multi-purpose banqueting conference centre.

Billionaire Tony Elumelu was the chairman of the Transcorp Hotels in 2020. In 2021, the bank likewise provided N12.75 billion to the elite hotel. By then, Emmanuel Nnorom had assumed the role of chairman, while Dupe Olusola served as managing director and CEO.

This puts the total credit granted to the hotel at N22.75 billion in both years. The BOI granted the loans at 10 percent – below the market rate of 13 percent to 15.5 percent interest rates – which was clearly acknowledged by the Transcorp Hotels in its annual reports since 2020.

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In Transcorps Hotels 2025 financial statement reviewed by Economy Post, the company confirmed the preferential terms, stating that the loan was used to upgrade its facilities and that the interest rate was below market benchmarks at the time of drawdown.

“The Company obtained a loan from the Bank of Industry (BOI) to procure equipment to upgrade the hotel rooms, kitchen, public area and equip a new multi-purpose banqueting conference centre. The interest rate of 10% on the loan was below the market loan rate between 13% to 15.5% at the time the loan was obtained,” it said.

As a result of the below-market pricing, the hotel has been recognising both the fair value of the loan and a deferred income component since 2020. Essentially, the financial benefit derived from the concessional rate is separated from the principal and treated as deferred income, which is amortised over the life of the loan rather than recognised upfront.

MSMEs struggle to access loans

The BOI was set up in 1964 to fund Nigeria’s industrial development. Its mandate is to provide financial assistance for large, medium and small enterprises. It targets the expansion, diversification and modernisation of existing enterprises, including the rehabilitation of failing ones.

The bank’s focus sectors include: Agro processing and food (financing cassava, oil palm, rice, cocoa, and cashew processing, as well as livestock and agricultural commodities), and manufacturing (supporting light manufacturing, local production and industrial efficiency, including chemicals, pharmaceuticals, and general consumer goods).

BOI also supports renewable energy and power (solar solutions and clean energy projects); creative and digital industries (fashion, film, music, arts, and digital content creation); solid minerals and mining (financing exploration, mining, and processing of materials); healthcare and petrochemicals (pharmaceutical companies and medical infrastructure), as well as small and medium enterprises (targeted funding for waste management, youth entrepreneurship, and cottage agro-processors).

However, the development bank did not include hotels as part of its funding project. While hotels contribute to Nigeria’s gross domestic product (GDP), it does not boost industrial development, which makes the BOI’s funding of Transcorp Hotels curious.

“Several manufacturers and micro, small and micro businesses cannot access credit from the BOI,” said a Enugu-based manufacturer, Mr Ifeanyi Okeleke, who operates an agro-processing outfit, Kenfrancis Farms.

“I have tried many times to get credit from BOI but could not. Yet, what the bank does is to give out loans to those who are connected.”

The BOI disbursed N636 billion to 7000 businesses in Nigeria, helping to bolster ecoonomic growth. “The N636 billion disbursed by the Bank of Industry in 2025 translates directly into productive capacity across Nigeria,” President Bola Tinubu said last month, thorugh his spokesman, Mr Bayo Onanuga.

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“At a time of global financing constraints, Nigeria expanded access to long-term capital for its businesses. That is a direct outcome of reform, credibility and institutional discipline.”

However, a small business expert, who pleaded anonymity, said the BOI has been disbursing loans to those who should get them but noted that the bank must improve in several areas.

“The BOI has done relatively well,” the expert said. “But it still does little compared to expectations of manufacturers and MSMEs. I hear a lot about of businesses that are not in the industrial sectors getting these loans. However, I still compaign for the recapitalisation of the BOI to enable it fulfill its mandate,” he said, while condemning the prefrential treaatment given to organisations by the bank.

BOI fails to respond

Text messages and an email sent to BOI spokesperson, Ms Theodora Amechi, to explain why a hotel got BOI loans were replied more than two weeks after they were sent.