Nigerian Industrial Development Bank
The Nigeria Industrial Development Bank (NIDB) originally known as ICON; an acryonym for Investment Company of Nigeria was a prominent national development finance institution in Nigeria. It was originally a privately managed firm involved in development financing in Nigeria and was then the major buyer and seller of stock on the Lagos Stock Exchange, while it also operated the exchange. A reconstructuring that began in January, 1964, creaed an outgrowth of ICON and a new firm, the Nigerian Industrial Development Company emerged. It was then the firm became fully a national development fianance company along with other firms such as Nigerian Bank for Commerce and Industry (NBCI), Nigerian Agricultural and Cooperative Bank (NACB) and Federal Mortgage Bank of Nigeria (FMBN). (1)
NIDB came into existence in 1964 after the restructuring of ICON. The new company was chartered to provide medium and long term credit to existing and emerging industrial and mining firms in Nigeria. A reconstruction of ICON to NIDB brought in the federal government of Nigeria and the World Bank/International Finance Corporation as partners. Originally, the firm had 42 Lagos sharehlders holding about 20% of the equity and 56 foreign shareholders holding about 80% of the company. The comapany originally had a paid up capital of 1 million pounds.
After the recontrusturing, NIDB had an authorized capital of 5 million pounds with about 20% of the shares of the bank held by Nigerians and about 10% each held by the Central Bank and IFC. A few international finance houses also held shares, banks such as Chase International Investment Corporation, Bank of America, Irving International Financing Corporation, IBEC, Northwest International Bank and Chemical Overseas Financial Corporation expanded there overseas risk portfolio and may have invested in the bank as a result of its relationship with Nigerian Stock Exchange.
In 1974, NIDB had a share capital of about 100 million naira.
On March 22 2006, the top nine stories of a 21-story Nigerian Industrial Development Bank building in Lagos collapsed. This happened after a fire had gutted two stories in the building earlier that month. Heavy winds during a thunderstorm caused the building to cave in from the structural weakness after the fire. 2 people were killed.
Questions about the performance of many development finance institutions including NIDB in the furtherance of industrializing the country have dogged the company especially at the onset of the second Obasanjo administration. Lately, the bank underwent a reconstruction which led to its name change from NIDB to the Bank of Industry (BOI). The new company was a merger of NIDB, the Nigerian Bank for Commerce and Industry and the National Economic Reconstruction Fund.
Reasons given for the poor performance of the bank's major sector: the Small and Medium scale industries, were the preponderance of sole and family proprietorships in many new and emerging industrial firms. This situation provides an hindrance to the elongation of a firm after the death of its proprietor. The poor infrastructure in the country, a high level of loan default, leading to the depletion of future availability of credit, and poor fundig of the institutions were also given as reasons for the failure of the sector.(2)