Last Updated on November 28, 2023 by admin
Micro Small and Medium Enterprises are major contributors to job creation and global economic development. They represent about 90% of businesses in developing nations like Nigeria.But they are likely to be able to obtain bank loans than large firms; instead, they rely on internal funds, or cash from friends and family, to launch and initially run their business.
Micro Small and Medium Enterprises are searching for wholesale development finance institution that will provide long-term financing and partial credit guarantees that will give business a much-needed boost and hence improve their profitability
The Micro Small and Medium Enterprises loan facility is a special intervention fund provided by the Central Bank of Nigeria to support business You get this loan at a low interest cost and enjoy long-tenured repayment structure; to assist your business in enhancing capacity for employment generation, growth and economic development
The loan facility is a Special intervention fund of N220bn created by the CBN to provide low cost, long tenored funds to MSMEs to enhance their capacity for employment generation, economic development and inclusive growth.
The Agribusiness small and medium enterprises investment is designed specifically by the federal government to promotes agricultural businesses of micro, small, medium enterprises(MSME) which serve as vehicle for sustainable economic development and employment generation.
Also read: How to apply for UBA small and medium enterprise loan
The loan Maximum tenure is 5 years with Maximum interest rate of 9% all-in, the Credit facility is available either as term loan or overdraft.
Who Can get the Micro Small and Medium Enterprises loan
Tested and trusted customers of any nigeria commercial and microfinance bank seeking to expand their agri-businesses using low priced credit facilities as made possible under the scheme.
Not for start-up projects
How to qualify for Micro Small and Medium Enterprises loan
1.No record of non-performing loans with any financial institution
2.Maximum obligor limit is N50m.
3.Management experience of at least 3 years in the enterprise to be funded is required.
4.Collateral includes landed property with EFSV of 130% of facility limit, lien on assets/commodity being financed, all assets debenture on assets and Guarantee of Promoters/Directors for the bank’s exposure.
Required documentations to apply for Micro Small and Medium Enterprises loan
1.Formal application for a credit Facility
2.Certificate of Incorporation
3.Memorandum and Article of Association
4.Board Resolution to Borrow
5.Feasibility Study/Business Plan
6.Business plan including cash flow projection with assumptions, marketing plan, repayment plan and draw down schedule.
Read: Union Bank SME Loans: Requirements and how to apply
Acceptable Collateral
Any or a combination of the following collateral shall be accepted by the CBN as security for loans from PFIs (excluding DMBs) to cover a minimum of 75% of the loan amount:
a) Financial Assets including pledge of Treasury Bills,
Placements, Bonds, etc.
b) Third Party Guarantee from at least two (2) Board
Members/Trustees and/or Third Party Guarantee from
high net worth individuals
c) Any other collateral acceptable by the CBN from time to
time.
Requirements
1. Duly completed application form.
2. Bank Verification Number (BVN).
3. Certificate of Training from recognized Entrepreneurship Development Institution (EDI) or evidence of membership of organized private sector
4. Letter of Introduction from any of the following, Clergy, Village Head, District Head, Traditional Ruler, senior civil servant, etc. (for individuals/ micro enterprises only).
5. Evidence 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).
6. Tax Identification Number (TIN) and current Tax Clearance Certificate TCC) where applicable.
7. To qualify to access this fund, you need to have been trained by an Enterprise Development Institute after which you will fill the form. They will submit your form to CBN.
8. CBN will ask banks to verify your account details and then CBN proceeds to conduct its own assessment.
Also Read: How to apply for Wema Bank Business and Retail Loan
Eligible sectors/businesses
1.Agricultural sector.
2.Real sector including Manufacturing, mining, and petrochemicals.
3. Service sector including Information and Communication (ICT) and the Creative Industry.
4. Other businesses as determined by the Central Bank of Nigeria (CBN)
How to apply
Walk in to Participating Financial Institution which are any commercial bank and MFB branch to apply for Micro, Small and Medium Enterprises Development Fund (MSMEDF)
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