In an effort to foster an enabling environment for small enterprises across the country, the Federal Government of Nigeria has pledged to offer single-digit interest rate loans for SMEs by 2025.
This announcement was made by Temitola Adekunle-Johnson, the Senior Special Assistant on job creation and MSMEs, at a recent town hall meeting in Abuja, part of the Presidential Grant and Loan Scheme for MSMEs.
He highlighted that SMEs are the backbone of the Nigerian economy, constituting over 80% of the labor force and contributing nearly half of the national GDP.
The initiative is a response to longstanding challenges faced by SMEs in securing affordable loans. Access to loans, for small businesses, has been further impacted by the Central Bank of Nigeria’s latest monetary policy rate hike to 27.25%.
However, the new scheme, facilitated in collaboration with major financial institutions such as Access Bank, Wema Bank, and the Bank of Industry, aims to address these financial barriers by offering loans at significantly reduced interest rates.
Additionally, the Nigerian government has allocated N75 billion specifically for MSME support, as announced by the Minister of Information, Mohammed Idris. This funding is part of a broader economic reform agenda designed to strengthen Nigeria’s business environment amid ongoing reforms.
The initiative will be transparent, Idris stressed, allowing eligible SMEs to apply directly without requiring personal connections within the government. Additionally, the initiative aligns with other initiatives, such as tax reforms, to alleviate the economic strain on businesses.
Officials from the Bank of Industry (BOI) have urged prospective beneficiaries to apply promptly, as the loan scheme will operate on a first-come, first-served basis.
Successful applicants may receive loans up to N1 million, repayable over three years, with the scheme expected to create substantial direct and indirect employment opportunities.
