In Nigeria, the federal government offers loans to encourage innovation and entrepreneurship with the overall goal of improving the Nigerian economy.
Government loans are funds given directly by the government or made by private lenders, like banks, and backed by the government. The loans are for a specific purpose and, in most cases, monitored for effective use.
Different government agencies facilitate federal government loans to provide support for small, medium, and large businesses.
Which Federal Government Agencies in Nigeria Support Business Owners?
Bank of Agriculture (BOA)
Bank of Industry (BOI)
Central Bank of Nigeria (CBN)
Development Bank of Nigeria (DBN)
Nigerian Export-Import Bank (NEXIM)
Small and Medium Enterprises Development Agency of Nigeria (SMEDAN)
Federal Mortgage Bank of Nigeria (FMBN)
58 Federal Government loans you can access and how to get it
The primary goal of the government in granting loans is to improve the economy, especially the underperforming sectors.
We will categorise the loans into the different sectors of the economy, so you can easily pick yours.
Micro, Small, Medium, and Large Enterprises
The size of a business is classified by the number of employees it has, among other factors. In Nigeria, microbusinesses have 1-9 employees. Small businesses have 9-49 employees. Medium businesses have 50-249 employees. Large businesses have 250+ employees.
Renewable energy/energy efficient products and technologies
Trade and general commerce. Only 10% of the fund will apply to trade and commerce, so they might not give it priority.
Other economic activity as the CBN prescribes.
Bottom of Pyramid: The Bank of Industry (BOI) facilitates this for micro-enterprises. It targets the funds at people/businesses who are economically active but have little or no access to the current commercial banking structure. It administers the fund through Microfinance Banks.
Graduate Entrepreneurship Fund: This fund is for National Youth Service Corps (NYSC) members who are undergoing the one-year compulsory programme. You can only use it for businesses within the Bank of Industry’s SME clusters.
Solar Energy Fund: You can access this fund through BOI or other designated commercial banks.
Youth Entrepreneurship Support (Yes) Program: The Bank of Industry put this Fund in place to encourage self-employment in youths between the ages of 18–35 years. There is a minimum requirement of an Ordinary National Diploma (OND) qualification for applicants.
FGN Special Intervention Fund for MSME (NEDEP): This is a special fund by the Federal Government put in place as an intervention for MSMEs to get loans at an interest rate of 9%. The fund also serves loan applications from SMEDAN through the National Enterprise Development Programme (NEDEP)
BRAVE Women: BOI executes this fund funded by the Women Entrepreneurs Finance Initiative (We-Fi). The fund is to enable an empowering environment for women Entrepreneurs in Nigeria. This 5-year fund lasts until 2023.
Wholesale lending: The Development Bank of Nigeria provides wholesale term funding and risk-sharing facilities through Financial Institutions to MSMEs. Its primary aim is to support local entrepreneurs and small businesses.
National Program on Food Security (NPFS): The Bank of Industry implements this fund scheme with the Federal Ministry of Agriculture and Rural Development. They target the fund at Agro-allied processors and Farmers.
Rice and Cassava Intervention Fund: This Fund is for the establishment of ten (10) medium scale Rice Mills of about 36,000 metric tons of paddy per annum and six (6) high-quality Cassava Flour Mills of about 18,000 metric tons of cassava tubers per annum. The Mills are to be in Kano, Kogi, Kebbi, Zamfara, Bayelsa, Bauchi, Benue, Ogun, and Anambra, States for the Rice Mills and in Ondo, Ogun, Abia, Delta, Nasarawa, and Cross River, States for the high-quality Cassava Flour Mills.
Trade is one sector that dominates the Nigerian economy, at 16.86% of the GDP. This includes export, wholesale, and retail trade. The Nigerian government is especially promoting the export of locally made goods to grow the Naira. These are the loan facilities available for the trade sector, especially exports:
Export Credit Guarantee Facility: This is a guarantee given by NEXIM to banks that loan money to exporters. This is because of the reluctance of banks to loan money to exporters in the pre-shipment stage. Watch this short video to learn more about the facility. Export Credit Guarantee.
Non-Oil Export Stimulation Facility (NESF): The CBN administers this loan facility to boost the export of goods other than oil. They put it in place in October 2017 with a tenor of ten (10) years (i.e., it will last until 31st December 2027).
Direct Lending Facility: This is a fund specifically for exporters. It is to foster their trade and aid them with incentives, including equipment that will boost their production.
Foreign Input Facility: This is a loan given by NEXIM in foreign currency to some participating banks on behalf of loan applicants. To access this loan, you would have to go through a qualified bank.
Local Input Facility: This is like the foreign input facility, but the NEXIM bank issue the loan in the local currency.
Export Credit Insurance Facility: This insurance scheme is to cushion the effect of non-payment by buyers of export products. It only applies if the non-payment resulted from circumstances out of their control. Watch this video to learn more about this insurance facility. Export Credit Insurance.
Women and Youth Export Facility (WAYEF): This is fostering an increase in funding for women and youth between the ages of 18 to 35 years. This facility applies to Women and youth in the export of non-oil products.
N235 billion CBN intervention fund for manufacturing, refinancing, and restructuring facilities for banks’ loans. They put it in place to increase the access of manufacturers to credit facilities, fast-tracking their growth.
N300 billion CBN power and airline intervention fund (PAIF). This is for fast-tracking the development of the power and Aviation Industry through easy access to credit facilities.
NADDC Fund: This is a fund for manufacturers of automobile parts and Car assembly plants.
BOI/State Matching Funds: This fund results from a partnership between BOI and some state governments. The fund is available to companies involved in manufacturing and Agro-processing. You can access it through the various states’ Ministry of Commerce and Industry. The fund is available in all states except Katsina, Lagos, F.C.T., Nasarawa, Plateau, Abia, Rivers, Adamawa, Yobe, Bauchi, Akwa Ibom, Bauchi, Imo, and Jigawa states.
BOI/Dangote Foundation Matching Funds: This is a Five Billion Naira matching fund that business enterprises and Limited Liability Companies involved in manufacturing and Agro-processing can access.
Nigeria’s healthcare is a critical sector that has received as little attention as it should. There is, however, some movement to grow it. The few facilities available are:
Valid means of identification (driving license, passport, voter’s card)
Proof of address
Guarantor and his personal details
Details of collateral offered
There are also some SME loans you can only access through clusters. That is a group of small business owners who are in the same industry. It could also be a co-operative society or an association.
This is a comprehensive list, but it is important to always research to weigh the options available to you. While researching, you might be lucky enough to access better options like grants or interest-free loans from non-governmental organisations. Overall, a federal government loan will ease your growth or expansion plans. You should not hesitate to apply. If you have questions about the loan application and its requirements, book a free consultation with our Counseal expert
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