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FG To Offer Single-Digit Interest Loans To SMEs

Published

2 weeks ago

Nov 6, 2024.

The Federal Government has announced plans to begin disbursing loans at single-digit interest rates to Small and Medium Enterprises (SMEs) by the third quarter of 2025.

This initiative aims to provide affordable financing to small businesses that often struggle with high interest rates and collateral requirements.

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EKO HOT BLOG reports that Temitola Adekunle-Johnson, the Senior Special Assistant on Job Creation and MSMEs, revealed the plan during a Nationwide Townhall and Sensitization Programme on the Presidential Grant and Loan Scheme for MSMEs, held in Abuja.

He emphasized that supporting SMEs is crucial as they represent the backbone of Nigeria’s economy, employing over 80 percent of the nation’s workforce and contributing nearly half of its GDP.

Adekunle-Johnson highlighted the challenges faced by small businesses in accessing affordable financing. The Central Bank of Nigeria’s (CBN) continuous hikes in the Monetary Policy Rate (MPR) have made loans costly for businesses.

At its last meeting, the CBN raised the MPR to 27.25 percent, further limiting economic activity and increasing borrowing costs. Additionally, many SMEs lack the collateral required by traditional banks, further hindering their access to financing.

To address these issues, the government, in collaboration with private sector partners such as Access Bank, Wema Bank, and the Bank of Industry, has outlined a loan disbursement program designed to support SMEs. The initiative is set to launch in the third quarter of 2025 across all states, offering loans with single-digit interest rates.

Furthermore, 18 state governments have shown interest in implementing the program at the state level. Adekunle-Johnson noted, “As a small business owner, you will soon be able to access loans with single-digit interest, which is essential.

Businesses need an environment where they can secure funds, invest in their operations, and repay at a manageable rate. Small businesses don’t need a token; they need meaningful support to grow.”

Single-Digit Loans SMEs

This initiative represents a significant step by the Federal Government toward creating a more supportive financial environment for SMEs, with the goal of driving economic growth and increasing job opportunities nationwide.