For Nigerian entrepreneurs looking to start or expand a business, federal loans could be a viable option.
The Nigerian Government has several initiatives to help both large and small companies. However, the focus of these initiatives is on smaller businesses.
For various reasons, the government is focusing on small, large, and medium businesses (SMEs). The government believes that the SME sector is a key element of a healthy market economy. SME companies make up the majority of businesses in Nigeria. They also contribute to the creation of jobs and value-added.
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The FGN provides funding to businesses through various government-backed organizations or agencies, such as:
- Bank of Agriculture (BOA),
- Bank of Industry (BOI).
- Central Bank of Nigeria
- Development Bank of Nigeria
- Nigerian Export-Import Bank (NEXIM)
- Small and Medium Enterprises Development Agency of Nigeria
FGN offers a variety of loan products and rates, as well as repayment schedules.
The Federal Government of Nigeria offers a variety of loan and funding options.
Bank of Agriculture (BOA),
The Bank of Agriculture, a state-owned institution, provides credit to farmers and other agricultural businesses. The Bank of Agriculture provides loans and other forms of financing to farmers and agricultural businesses.
BOA offers a wide range of products and services.
- Agro-Processing Facility
- Direct Credit Product
- Equipment Leasing Product
- Export Finance Facility
- Earn More and Expand Your Business (GEM).
- Haulage Credit Facility
- Loan with Hides for Revival and Skin
- Credit Facility for Input Purchases
- Inventory Credit Facility
- Big Credit Product
- Ranching Development Credit Facility
- Sugar Revival Credit Facility
- Youth Agricultural Revolution in Nigeria (YARN)
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Bank of Industry (BOI).
The Bank Of Industry Loan provides long-term funding to the Nigerian industry sector. The primary sectors are agroprocessing, agriculture processing, information and communications technology, oil and gas, minerals and the creative industries.
BOI products and services include
- ASM Fund
- Pyramid bottom
- Fashion and Beauty Products
- Light Manufacturing
- Food and agricultural commodities processing
- Graduate Entrepreneurship Fund
- Nollyfund
- Commercial Banks Loans
- Solar Energy
- Youth Entrepreneurship Support (Yes) Program
- Youth Ignite program
- BOI/CBN Intervention Fund
- Cassava Bread Fund
- Cement Fund
- Cottage Fund
- FGN Special Intervention Fund (NEDEP), for MSME
- NADDC Fund
- National Program on Food Security
- Rice and Cassava Intervention Fund
- Sugar Development Council Fund
- BOI/State matching Funds
- BOI/Dangote Foundation Matching Funds
Central Bank of Nigeria
The Central Bank of Nigeria provides a variety of loans to businesses across the country through its various development finance initiatives.
CBN Services and Products include
- Anchor the Borrower’s Programme
- Commercial Agriculture Credit Scheme
- Creative Industry Financing Initiative
- Healthcare Sector Credit Support Scheme
- Maize Aggregation Schema
- Micro, Small, Medium Enterprises Development Fund
- Non-Oil Export Stimulation Facility
- Paddy Aggregation Scheme
- Real Sector Support Facility
Development Bank of Nigeria
The Development Bank of Nigeria, is a wholesale banking institution. The DBN is a wholesale financial institution that aims to increase credit to small and medium businesses.
DBN Services and Goods include
- Wholesale Credit
- Partial credit risk guarantees
- Capacity Building – The capacity development program of the DBN Enterprise Training Program
Nigerian Export-Import Bank (NEXIM)
Nigerian Export Import Bank was created to facilitate the export of goods and services in Nigeria. Businesses involved in export activities are eligible to apply for a NEXIM Loan.
The NEXIM products and solutions include
- Direct Lending Facility
- Foreign Input Facility
- Local Input Facility
- Nigerian Creative Industries and Entertainment Loans
- Small and Medium Enterprise Export Facility
- Storage Facility (SF),
- Women and Youth Export Facility
- Export Development Facility (EDF).
- Trade and Investment Promotion for Nigerians from Africa Program
- Refinancing and Rediscounting Facility (RRF).
- Foreign Credit Guarantee Facility
- Export Credit Insurance Facility
Small and Medium Enterprises Development Agency of Nigeria
SMEDAN has the responsibility of encouraging, monitoring and coordinating growth for MSMEs in Nigeria. SMEDAN helps MSMEs to access financing and credit.
SMEDAN Services & Goods include
- Plan of empowerment for Automotive (Component Parts Fabrication).
- Commercialization Empowerment Initiative for ICT
- Conditional Grant Scheme
- Enterprise Network Initiatives
- Financial Empowerment for MSMEs
- Garment and Textile Cluster Growth Support Scheme
- Hewlett Packard – Learning Initiative for Entrepreneurs (HP – Life)
- Leather Cluster Enterprises Scheme
- MSME Market Linkage Initiative
- One-Local Government-One-Product (OLOP)
- SMEDAN Cloud MSMEs
- The Waste-to-Wealth Cluster Enhancement and Development Enhancement Scheme
- Young Business Owners in Nigeria (Y-BON)
You may be eligible for a loan from the Federal Government of Nigeria
Any Nigerian resident can apply for a Federal Government of Nigeria Loan, provided that they already have a business or want to start one.
For the loan that you are seeking, your company does not need to register with the Corporate Affairs Commission. If you need to register your company, then it is usually as part of a financing program or initiative that you are interested.
Depending on your business, you might also need to register with the National Agency for Food and Drug Administration and Control, or NAFDAC, as well as the Nigerian Export Promotion Council, (NEPC), and Standards Organization of Nigeria, (SON).
FGN loans are available to both limited liability companies as well as registered business names. As a limited liability company, you are eligible for a much larger amount.
For your business to qualify for a government loan, you must have had a trading history, i.e. it must be operational. Other FGN loans don’t meet these criteria so new businesses are encouraged to apply.
Diverse agencies in the federal government manage and distribute these loans that The Federal Government provides. Each agency has its own lending guidelines or requirements.
Your business may only qualify for certain funding schemes or programs offered by the FGN. If your company doesn’t export goods or services, then it won’t be eligible for an NXIM Loan. If your company is not involved in agriculture, you are not eligible for a BOA. The list goes on.
The government loan is available for many purposes depending on the credit facility used.
Loans for the purchase of real estate are typically not guaranteed.
How can you apply for a Federal Government of Nigeria Loan?
In order to find a government loan that you and your business can both apply for, it is necessary to research the products available.
You can apply directly to the government agency that manages your loan or you can go through a commercial lender who is also a participant.
Several applications can be filled out online. Most applications require that you fill them out in person at the branch or office.
Guidelines for funding programs or loan facilities will evaluate your business’ suitability and the reasons for the loan. The funds you receive will depend on the terms of the approval letter.
No matter which agency, credit facility or financing initiative you are applying to, some documents of fundamental nature will be required. The following list may include documents you need:
- Completed application form
- Company profile
- Business Plan
- Budget for cash flow
- Statements from Banks (12 Months)
- Financial statements audited
- Certificate of Incorporation
- Valid identification documents (driver’s license, passport, voter card, etc.).
- Address Proof
- Details of collateral offered
Checklists should include a list of all required documents. If you’re starting a business, you don’t need to provide financial statements from an auditor or an Incorporation Certificate. When you are a large limited company, however, and need items such as a tax clearance certification and other things.
The most frequently asked questions
How long does it take to receive money from the Federal Government of Nigeria in Nigeria?
The length of time it takes to process an application is largely determined by the type of financing or credit facility that you are requesting. The approval of a government loan takes longer than obtaining money on the private market. This is not always the case.
How much can I receive from the Federal Government of Nigeria
You can borrow a different amount. The more established and larger your business is, the bigger the loan you can get. The government may offer loans starting at just a few Nigerians, and going up to and exceeding one billion Nigerians.
Does the Federal Government of Nigeria offer grants?
The FGN will provide grants in lieu of loans. Each grant scheme will be managed by the appropriate government agency.
Is collateral required by the Federal Government of Nigeria?
The primary factor in determining whether or not collateral is required depends on the type of financing program that you apply for. When large sums of money are being loaned, collateral is likely to be required. In the absence of collateral, personal guarantees or those from third parties may be accepted.
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