SMEDAN, BoI to disburse N1 billion single-digit loans to small businesses

The Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) and the Bank of Industry (BoI) have signed a Memorandum of Agreement (MoA) for the pooling of N1 billion to provide single-digit interest rates to nano and micro enterprises in Nigeria.

In the pact, which was sealed in Abuja yesterday, the two Federal government-owned institutions are to deposit N500 million each into a matching fund account to be managed by the Bank of Industry.

Speaking during the signing ceremony, the Managing Director of BOI, Olasupo Olusi, said the journey to signing the agreement has been challenging.

He, however, noted that the signing of the agreement marked the beginning of many more fruitful relationships between the two organizations.

In his remarks, the Director-General of the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), Charles Odii, commended the Managing Director of the Bank of Industry and the joint technical team that put the agreement together for the roles they played in making the relationship a reality.

Odii described the signing of the agreement as historic and a milestone in the struggle to democratise access to finance for nano and micro enterprises in Nigeria.

Under the agreement, nano enterprises can access a maximum of N1.5 million while micro-enterprises can access a maximum of N2.5 million.

A statement by the director, Agribusiness Development and Extension Services Department of SMEDAN, Levi Anyika, said loan applicants are required to provide two guarantors as part of the security for the loan.

The tenor of the loan is 24 months while a working capital loan attracts 7.5 per cent interest rate per annum while a term loan attracts five per cent interest rate per annum.