Last Updated on February 12, 2021 by Ope Quadri
Do you know that there are several SMEs loans funded by the Central Bank of Nigeria (CBN) you can apply for to boost your business?
We’ve got the full list here for you to pick the most suitable for your business and delve into how you can access them in our subsequent guideline.
Hundreds of Nigerian entrepreneurs think that the apex bank only plays a regulatory role, that’s not true.
Indeed, CBN is a major player in microfinancing and funding of Small and Medium Enterprises (SMEs).
Some of the businesses the apex bank is funding include:
- Agricultural business
- Information technology
- Healthcare research
- Movie production
- Software engineering
- Fashion etc
The good news is…
You can get as much as N500 million CBN loan to fund your business, depending on the size, profitability, feasibility, and well curated-business plan you set out.
Whichever CBN loans you are planning to access to boost your business, you must know that the apex bank does not credit your account directly. Loans are disbursed through banks and other financial institutions licensed by the CBN.
Little was heard about CBN loans until the outbreak of the deadly coronavirus (COVID-19). It became imperative for the apex bank to rescue businesses which had financial challenges as a result of the impact of the pandemic.
Here is the full list of CBN SME loans you can apply for:
- ABP: Anchor Borrowers Programme (ABP)
- AGSMEIS: Agri-Business/Small and Medium Enterprise Investment Scheme
- MSMEDF: Micro, Small and Medium Enterprises Development Fund
- CIFI: Creative Industry Financing Initiative
- AADS: Accelerated Agricultural Development Scheme
- HSRDIG: Healthcare Sector Research And Development Intervention Scheme
So, who and what kind of business can apply for any of these loans? Let’s take a look at how significant these loans are to small businesses in Nigeria.
Anchor Borrowers Programme Loan
Do you know that the ABP loan has been around for close to five years? Yes, the ABP loan was launched by President Muhammadu Buhari on November 17, 2015.
It’s designed to create a linkage between anchor companies involved in the processing and smallholder farmers (SHFs) of the required key agricultural commodities.
The mandate of the loan are:
1) Provision of farm inputs in kind and cash (for farm labour) to smallholder farmers to boost production of these commodities
2) To stabilize inputs supply to agro-processors
3) To address Nigeria’s negative balance of payments on food.
How does it work?
At harvest, the SHF supplies his/her produce to the Agro-processor (Anchor) who pays the cash equivalent to the farmer’s account.
Basically, it’s meant to reduce Nigeria’s reliance on food importation which gulped billions of naira every month.
Agri-Business/Small and Medium Enterprise Investment Scheme
The AGSMEIS is the most popular of all the CBN SME loans targeting the agricultural sector in Nigeria. It’s popular because of the sensitisation by the CBN and its partners.
It’s basically designed as a vehicle for sustainable economic development and generate employment among the teeming Nigerian youths.
Provided your business is registered by the Corporate Affairs Commission (CAC), which is a prerequisite to access SME loan, and you’ve undergone training by entrepreneurship training centres recognised by the CBN and the Bank of Industry (BOI).
Micro, Small and Medium Enterprises Development Fund
One of the objectives of the MSMEDF loan is to enhance access by business owners to financial services, says the CBN when it was launched on August 15, 2013.
The reason for this loan was the fact that the apex bank recognised the enormous contribution of the Micro, Small and Medium Enterprises (MSME) sub-sector to Nigeria’s economy.
We’ll tell you more on what you need to do to access MSMEDF loan in our subsequent guide.
Creative Industry Financing Initiative
CIFI loan is another CBN funding that is popular in the creative industry particularly if you business falls within fashion, movie production, movie production, and music among others. It is accessible through commercial banks.
Accelerated Agricultural Development Scheme Loan
Apart from its main objective of engaging a minimum of 370,000 youths in agricultural production, it is also designed to reduce unemployment among the youths.
State governments who are also partners were urged to focus on their comparative cost advantage.
For instance, Benue, Ekiti and Kogi States could concentrate on the plantation of yam while Osun, Oyo states focus on the plantation of corn.
Healthcare Sector Research And Development Intervention Scheme
HSRDIG is the newest of all the CBN loans. The idea to fund medical-related research came up during the outbreak of COVID-19, a deadly disease that ravaged the world.
Under this loan, CBN provides a minimum of N50 million in new or revalidation of the drug molecule, phytomedicines and vaccines for the control, prevention and treatment of infectious diseases in Nigeria.
It also meant to boost the domestic production of drugs we consume in Nigeria so as to reduce Nigeria’s dependence on other countries for drugs and vaccines.
Did we miss anything here? Feel free to share your thoughts with us as we urge you to look for how you can access these loans.