FG to Begin Distribution of N2.5 Million Loan to Nigerian Businesses, States Requirement to Apply

• The Bank of Industry and the Small and Medium Enterprises Development Agency of Nigeria have signed a new deal
• The deal involves offering a single-digit lending rate to nano and micro enterprises in Nigeria
• According to the agreement, micro-companies can obtain up to N2.5 million, while nano-businesses can get up to N1.5 million

Legit.ng journalist Zainab Iwayemi has over three years of experience covering the Economy, Technology, and Capital Market.

The Bank of Industry (BoI) and the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) have struck a Memorandum of Agreement (MoA) to pool N1 billion and offer single-digit lending rates to nano and micro enterprises in Nigeria.

The two federal institutions are required by the agreement, which was signed in Abuja, on Sunday, May 26, to contribute N500 million apiece to a matching fund account that will be overseen by the Bank of Industry.

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During the signing ceremony, BOI's managing director, Olasupo Olusi, stated that the deal's signing marked the beginning of many more fruitful partnerships between the two institutions.

On his part, Charles Odii, the Small and Medium Enterprises Development Agency of Nigeria's director-general, commended the joint technical team and the Bank of Industry's managing director for establishing the connection during his speech.

Odii described the signing of the agreement as significant and a turning point in the struggle to grant Nigerian nano and microbusiness owners more democratic access to credit.

The deal allows nano firms to access up to N1.5 million, while microcompanies can access up to N2.5 million, according to a Guardian report.

The director of SMEDAN's agribusiness development and extension services department, Levi Anyika, stated that loan applicants must provide the statements of two guarantors because of the loan's security.

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It is understood that the loan has a 24-month term, with an annual interest rate of 7.5% for working capital loans and 5% for term loans.

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In a related story, Legit.ng reported that the federal government announced that only one million out of the 3.6 million Presidential Conditional Grant Scheme applicants would be selected as beneficiaries.

The selected applicants are expected to get their funds by the end of May 2024.

The scheme offers a grant of N50,000 per beneficiary to support one million small businesses in all the 774 local government areas in the country.

Proofreading by James Ojo Adakole, journalist and copy editor at Legit.ng.

Source: Legit.ng