Home Banking, Finance & Investment How to apply for Central Bank of Nigeria N10M collateral free loan for small businesses

How to apply for Central Bank of Nigeria N10M collateral free loan for small businesses

by Radarr Africa

The Central Bank of Nigeria has announced they will be giving collateral free loans of up to N10,000,000 (Ten million Naira) to small businesses in a scheme called; Agric-Business/Small and Medium Enterprises Investment Scheme (AGSMEIS).

The Scheme is in line with government policy measures that seek to promote agricultural businesses, micro, small and medium enterprises (MSMEs) as vehicles for sustainable economic development and employment generation.

The aim of the collateral free loan is to:

1. Increase accessibility to inexpensive sustainable funding for Agri-businesses, Micro, Small and Medium Enterprises (MSMEs)

2. Improve employment opportunities in Nigeria.

3. Enhance the ability of agri-businesses and MSMEs to grow and manage their enterprises into large corporate organizations in motion with Federal Government agenda to grow the real sector and foster overall growth.

Categories of entrepreneurs covered by the Scheme

1. Businesses in the agricultural industry, ranging from production, processing, inputs supply, marketing, storage, and logistics.

2. MSMEs in the real sector including manufacturing, building  & construction, mining, and petrochemicals.

3. MSMEs in the service sector including information and communication technology (ICT) and the creative industry.

4. Artisans
5. Services, Trade, and general commerce,
6. Energy-efficient products or renewable energy and technologies

Other income-generating projects as determined by the Central Bank of Nigeria (CBN) as time goes on.

Terms and conditions

Funding under the Scheme is said to be for start-ups, business expansion or revival of dying companies and must conform to the provisions of BOFIA (1991) as amended.

The conditions of the loans are;

1. Loan limit: N10,000,000
2. Interest: 5% per annum
3. Time limit: Up to 7 years (depending on the kind/ period of the project)
4. Moratorium: Maximum of 18 months for principal and 6 months on interest.

Documents/ Records Required

Micro, Small and Medium Businesses:

1. Accurately completed application form

2. Bank Verification Number (BVN)

3. Training certificate from recognized Entrepreneurship Development Institution (EDI) ) or proof of membership of organized private sector association. e.g of EDI, Lagos Business School, House of Tara, Fate Foundation, Thrive Agric, etc

4. Proof of registration of business name or certificate of incorporation and filing of annual returns (where applicable) in compliance with the provisions of the Companies and Allied Matters Act (1990).

5. Letter of Introduction from any of the following, Clergy, Village Head, District Head, Traditional Ruler, senior civil servant, etc. (for individuals/micro enterprises only).

6. Tax Identity Number (TIN) and current Tax Clearance Certificate (TCC) where relevant.

Application Procedure

Micro, Small and Medium Enterprises:

1. Enroll with a CBN certified EDI for a one-week training
2. Qualified applicants should pick-up and submit a completed application form to the EDIs
3. The EDI then collates, appraises and submits applications to CBN.
4. CBN reviews the application and invites applicants for interviews
5. After approval, CBN approves the loan and makes payment to the necessary applicants.

How To Access Funding
You can only access your funds when you visit any Participating Financial Institution (PFIs) of your choice.

Participating Financial Institutions
The PFIs under the funding scheme are;
Micro applicants (N500,000 to N5,000,000) should approach:

Microfinance Banks
NGO-Microfinance Institutions
Finance Companies
Financial Cooperatives

SME applicants  (N5,000,000 to N50,000,000) should approach:

Development Finance Institutions and Deposit Money Banks (Bank of Industry and Bank of Agric)

Note that loans are given at an interest rate of 9.0% per annum (all charges inclusive) irrespective of the type of project. Benefitting applicants are expected to pay back all loans as and when due inclusive of any accrued interest to the PFI.

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3 comments

Mrs Ngozi Abu December 17, 2019 - 12:54 pm

Interesting. Nice to know

Reply
Bolatito Titogold December 17, 2019 - 6:35 pm

There is a need to train proposed beneficiaries on how to manage the funds so their business can survive.

Reply
Alphaeus Lynda December 17, 2019 - 7:12 pm

Wow! Great.

Reply

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