Getting capital is a major problem for SMEs, particularly in Nigeria, the poverty capital of the world. However, the bank may still be the best bet to access quick and easy loans for the segment which play a major role in economic development.
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Lagos State MSME Recovery Fund
Amount: ₦1,000,000 per Individual
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CBN Covid-19 Loan
Amount: ₦1,000,000 to ₦25,000,000 per Individual
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Nigeria Youth Investment Fund
Amount: ₦250,000 to ₦500,000 per Individual
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The National Bureau of Statistics puts the total number of Micro, Small and Medium Enterprises at 37 million while further statistics show that the number of persons employed by the MSME sector as at 2013 stood at 59.7 million, representing 84.02% of the total labour force with MSMEs contribution to the Nation’s Gross Domestic Product in nominal terms at 48.47% and contribution to export at 7.27%.
In spite of the significant contribution of the SMEs to the economy, challenges facing its operations in Nigeria are usually tied to inconsistency in government policies, poor infrastructure and support, access to market, multiple taxation and obsolete technology and importantly, access to finance.
READ: Apply For The 2022/2023 Federal Mortgage Loan Application
In a bid to ensure adequate financing, a number of Nigerian banks offer loans up to N500 million to help small businesses thrive. In addition to offering relatively low rates of interest, these loans are designed to suit varieties of businesses and some require no collateral.
Nairametrics highlights some of the Nigerian banks offering loans in the country as follows:
Standard Chartered – Smart Business Loan offers up to N20 million
The Standard Chartered smart business loan provides SMEs access to loans of up to N20 million for business expansion with no collateral. According to a statement on the bank’s website, the loan allows for a flexible repayment plan which can be structured to suit businesses and flexible for up to 2 years.
Standard Chartered loan which can be accessed through the bank’s digital application forms automates repayment process and also allows for additional financing during loan tenor. This means that business owners can top up after 12 months if regular repayments are made.
Read: ₦ 7.5 million Government Loan Begins
First Bank – SME Product Financing offers N20 million – N500 million
The SME product financing is targeted at the overall growth of small and medium scale enterprises which are key drivers of the economy. According to the bank on its website offers varieties of options for featured SME products at competitive rate and flexible collateral and products.
The product depends on the nature of business and the business type determined the amount that can be made available to improve businesses. For instance, the cement distributor finance offers up to N120 million for 12 months to aid working capital of the distributors for business expansion while the Commercial Mortgage provides maximum loan of N100 million and requires a property purchased collateral as the product is designed to meet the funding needs of established small and medium scale enterprises in viable businesses with respect to acquiring business premises under the outright purchase or construction scheme.
Similar to these, offices seeking fund to increase their assets could be granted the Office Equipment loan which allows businesses to access up to N20 million and above and is designed to finance SMEs that require vehicles for operational use for day to day running of their businesses and the maximum loan is offered to fast moving consumer goods at N500 million for a period of 12 months to finance distributors FMCG companies in the bank approved list of principal for business expansion.