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How to access the micro, small and medium enterprises development fund

By Ujunwa Onuegbu

The MSME Development Fund was launched by the CBN on August 15, 2013 with a share capital of N220 billion. The Fund was established in recognition of the significant contributions of the Micro, Small and Medium Enterprises (MSME) sub-sector to the economy and the existing huge financing gap.

You can access up to N500,000 for Micro-business and N50 million for Small and Medium Enterprises (SME) at a maximum interest rate of 9% per annum.

Repayment of loan is maximum of one year for Micro-business and five years for Small & Medium Enterprises.

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Are you a woman in business? This loan is for you! As part of gender inclusion, 60% of the Fund is reserved for women and 40% for others; including persons with disability (2%) & Start-up businesses (10%).

Objectives of the MSMEDF

The broad objective of the Fund is to channel low interest funds to the MSME sub-sector of the Nigerian economy through Participating Financial Institutes (PFIs) to:

  • Enhance access by MSMEs to financial services;
  • Increase productivity and output of microenterprises;
  • Increase employment and create wealth; and
  • Engender inclusive growth

Participating Financial Institutes (PFIs)

  • Microfinance Banks
  • Commercial Banks
  • Cooperatives
  • Financial Companies
  • NGO-Microfinance Institutions
  • Development Finance Institutions, i. e, Bank of Industry & Bank of Agriculture

Eligibilty

Enterprises to be funded under the Scheme include:

a. Micro Enterprises

b. Small and Medium Enterprises (SMEs)

Microenterprises

  • Agricultural value chain activities
  • Cottage Industries
  • Artisans
  • Services
  • Renewable energy/energy efficient product and technologies
  • Trade and general commerce

Small & Medium Enterprises (SMEs)

  • Manufacturing
  • Agricultural value chain activities
  • Services
  • Renewable energy, energy efficient product and
  •  Technologies

Other economic activity as may be prescribed by the CBN.

Note: Only 10% of the Commercial component of the Fund is channeled to trade and commerce.

Also, Nigerian Agricultural Insurance Corporation (NAIC) Insurance is compulsory for primary agricultural production.

Requirements

A viable business plan and any other document requested by the bank.

Example: First Bank’s Required Documents are:

  • Formal application for a credit Facility.
  • Certificate of Incorporation.
  • Memorandum and Article of Association (MEMART).
  • Board Resolution to Borrow.
  • Feasibility Study/Business Plan.

Procedure

  • With your Business Plan go to any  PFIs of your choice
  • Request for loan
  • Your bank will discuss your request and provide you the fund

Be informed that the Central Bank of Nigeria did not authorize or appoint any agent to sell forms or collect any fee to access the Fund.  ONLY FORM AVAILABLE UNDER THE FUND IS THE FORM TO BE FILLED BY PARTICIPATING FINANCIAL INSTITUTIONS (PFIs) – to enable them access the Fund and IT IS FREE.

You’re therefore advised to beware of the activities of fraudsters and report anyone that approaches them with the fake forms to the law enforcement agencies.

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