FG gives pledge of single-digit interest loans to SMEs by 2025
FG gives pledge of single-digit interest loans to SMEs by 2025.
The Federal Government has stated that it will begin disbursement of loans at a single-digit interest rate to Small and Medium Enterprises by the third quarter of 2025.
The Senior Special Assistant on job creation and MSMEs, Temitola Adekunle-Johnson, made this announcement at a Nationwide Townhall and Sensitization Programme on the Presidential Grant and Loan Scheme for MSMEs on Tuesday in Abuja.
Adekunle-Johnson said the government was targeting the MSMEs with its intervention programmes because small businesses need an enabling environment and adequate financing to thrive.
He noted that SMEs remain the engine of the Nigerian economy and collectively employ over 80 per cent of the nation’s labour force, and contribute nearly half of the national GDP.
Access to cheaper loans has been a recurring issue for small businesses and even large-scale manufacturers in Nigeria.
This is due to the consistent monetary policy rate hike by the Central Bank of Nigeria. At its last Monetary Policy Committee meeting, the CBN raised MPR by 50 basis points to 27.25 per cent, stifling economic activities.
Also, many SMEs lack the collateral required by banks, making it difficult to secure loans, and are also challenged by exorbitant interest rates deterring their ability to seek formal financing, as repayment becomes burdensome.
But providing a solution to the issue, the Special Assistant said the current administration has finalised plans to begin loan disbursement at a single interest rate to small businesses next year.
He said, “The presidency is working in partnership with some of our commercial private sector partners like Access Bank, Wema Bank, and the Bank of Industry to ensure that from the third quarter of 2025, this administration across all states will start giving out single-digit loans.”
He further revealed that 18 state government have signalled their interest in initiating the program at the sub-national level.
He noted the program is in partnership with the Bank of Industry and commercial banks.
He added, “We will start giving out these single-digit interest loans in partnership with the
state governments. Currently, 18 state governments have signed up for that partnership. It means that as a small business owner, you can begin to access single-digit interest on loans, which is what you need. What you need is an environment that allows you to walk into the bank, collect money from your business, go around your business and pay back.
“That’s what you need. Small businesses don’t need a token to build their business. They need an environment that is confident. You need money for your business. You walk into the bank, you interact with them, and they check your books. You are worthy of what you are looking for. They give it to you. You run your business and you come back. With dignity. That’s what you need. We are going to provide that enabling environment and financial security. It will be provided to you by next year.
“We are in partnership with the Bank of Industry and some of the commercial banks to ensure that this is done. So you can be in Zamfara, Sokoto, or any state you are in. You will be able to get access to a single-digit loan facility.”
Speaking earlier in his address, the Minister of Information and National Orientation, Mohammed Idris, emphasised that boosting small businesses is integral to the economic reform agenda of the current administration.
He explained that despite economic headwinds occasioned by the policies of the government, key intervention programs have been implemented to businesses survive through the single-digit loan facilities.
He said, “We are also keen to ensure that these targeted support programs go a long way towards alleviating the pains and challenges being experienced on account of the bold economic reforms being implemented to put our country back on track of sustainable growth and prosperity.
“We fully recognise that these reforms may have caused temporary hardships, especially for vulnerable populations, and we will do everything in our power to cushion the discomfort. These single-digit loan facilities will be complemented by the ongoing tax reforms designed to reduce the tax burden on Nigerian businesses.”
The minister also listed ongoing interventions to include the N200bn loans and grants, amounting to N50bn, which were disbursed as one-off conditional grants, targeted at the Nano-businesses segment of the NMSMEs.
He said the second phase of N75bn, is targeting the Micro, Small and Medium businesses and the final phase of N75bn is for large-scale manufacturers.
The minister stated that under the Tinubu Social Intervention Programmes, applicants only need to submit their applications to access the interventions, without requiring connections or knowing someone in government.
He also explained that similar town hall meetings are being held simultaneously across the six geo-political zones of the country to gauge the sentiments of MSMEs and take advantage of the interventions to further enhance their businesses.
