Over 700,000 Nigerian Businesses Race for Share of FG’s N150bn Loan
- Hundreds of thousands of businesses in Nigeria are set to receive relief funds from the federal government
- The loans set to be disbursed by the government is initiated to aid businesses deal with the current economic hardship
- According to the FG, over 700,000 enterprises have already shown interest and are ready to collect the loans
Legit.ng journalist Victor Enengedi has over a decade's experience covering Energy, MSMEs, Technology and the Stock Market.
Approximately 700,000 manufacturers and micro, small, and medium enterprises have shown interest in accessing the Federal Government’s N150 billion loan designed to support businesses in Nigeria through the ongoing economic challenges.
Doris Aniete, the Minister of Industry, Trade, and Investment, disclosed this information and emphasized that the ministry is diligently working to ensure the timely disbursement of funds to qualifying businesses.
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The FG recently approved exempting manufacturers, farmers, and small businesses from paying withholding tax to lessen the tax burden on enterprises.
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Loan disbursements in phases
The minister, through her Special Adviser on Strategic Communications, Terfa Gyado, indicated that the disbursement would be carried out in phases, with the initial round of payments expected to begin shortly.
He said:
“Disbursement is yet to start but they are finalising the first batch. To date about 700,000 applicants have applied.”
According to The Punch, Gyado highlighted that the government is fully aware of the present business environment and established the fund to assist Nigerian businesses in managing the challenging economic conditions.
Two months ago, Aniete announced that the disbursement of the N150 billion loans to micro, small, and medium enterprises (MSMEs) and manufacturers would begin by the end of July.
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How to qualify for loan
To qualify for MSME loans of up to N1 million, applicants must have an established business that has been operational for at least one year or be a registered start-up.
They need to provide their CAC business registration documents, submit a bank statement for existing businesses or the chief promoter’s bank statement for start-ups, meet the required monthly turnover, and fulfill other criteria as specified by the bank.
In terms of security, applicants are required to provide a personal guarantee from the promoter, agree to the BVN covenant, and comply with global standing instructions and any other security measures mandated by the bank.
Regarding repayment, the loan is to be repaid in equal monthly instalments over a three-year period, with no moratorium.
The statement further noted that for manufacturers seeking loans up to N1 billion, applicants must select either working capital or asset financing, maintain a business or corporate banking relationship for at least six months, and submit any additional documentation required by the bank.
Asset financing offers a five-year repayment period while working capital financing provides a six-month moratorium on both principal and interest, followed by a 12-month equal instalment repayment schedule.
Loans to create jobs, boost economy
Speaking to Legit.ng, Roseline Uduak, a business analyst, said that the government's initiative to provide loans to small businesses is a commendable step toward boosting economic growth and reducing unemployment.
She said:
"By empowering entrepreneurs, these loans help foster innovation, create jobs, and stimulate local economies. However, the effectiveness of this program hinges on transparency, accessibility, and proper management. Ensuring that funds reach deserving businesses without bureaucratic bottlenecks or corruption is crucial."
She added that providing adequate support, such as training and mentorship, can enhance the impact of these loans, ensuring that small businesses not only survive but thrive in a competitive market.
15 profitable business ideas
In a corresponding piece, Legit.ng previously spotlighted a range of lucrative business concepts poised to generate substantial income for aspiring entrepreneurs.
These fifteen meticulously chosen and noteworthy business ideas are replete with practical potential, eagerly anticipating the innovative touch of entrepreneurial minds.
The options span various sectors, encompassing activities such as crop production, livestock farming, blogging, ride-hailing, event planning, and second-hand goods trading.
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Source: Legit.ng
