FGN special intervention fund for MSMEs

In my previous posts we covered information about the AGSMEIS and MSMEDF loan scheme, the Eligibility, Procedure and Requirements. If after going through and you feel that your business does not qualify for the loan scheme, then you should try the Federal Government Special Intervention Fund for Micro Small and Medium Enterprises (FGN).

By Ujunwa Onuegbu

This is my favorite loan scheme because it is specific and covers a lot of businesses. Irrespective of the type of business, there is something for you. And if your business is not listed, you can provide information about your product to be reviewed by the Bank of Industry.

FGN special intervention fund for MSMEs also known as National Enterprise Development Program was initiated to provide subsidized loans to micro, small, medium enterprises at a single digit (9% per annum) interest rate. The fund is also to cater for applications received from SMEDAN under the National Enterprise Development Program (NEDEP) scheme.

The fund is aimed at stimulating economic activities for SMEs engaged in manufacturing and Agro-processing businesses. The fund can be accessed by duly registered limited liability companies, enterprises and cooperatives in Nigeria.

Applications are received and processed by the Bank of Industry (BOI) including disbursement and repayment.

BUSINESSES ELIGIBLE FOR THE LOAN

Adire (Tie& Dye) / Aso okeDigital Printing/ Multimedia publishingGreenhousesPlastics
Animal FeedsDoors & Window FramesLaundry & DrycleaningQuick Service Restaurants
AquacultureE-commerce/ information communications Technology ICTLeather & Foot wearQuarries
BakeryFashion/ GarmentingMeat ProcessingRecycling
Blocks & interlocking StonesFish Smoking/ DryingMechatronicsRoofing Sheets
Bottled waterFood Processing (including Agricultural produce)Health care (Medical Diagnostics)Soap/Detergents
Ceramics & TilesFoundries/ Metal Fabrication/ 3-D printingLaboratory / Orthodontist /Ophthalmology / PhysiotherapySolar (off grid)
Chemicals and paintsFruit JuiceMovie ProductionTechnical /Vocational Schools (Offering City &Guild Certificate)
Cosmetics/ Hair ProductsFurniture & Wood ProcessingLight ManufacturingTheme Parks
DairyGemstonesWater TransportationGrocery Packaging

REQUIREMENTS

Micro Credit

  1. Formal letter of application
  2. Photocopy of Certificate of registration
  3. Business plan
  4. Four passport photographs of the business owner
  5. Any form of ID; National Identity Card, international passport or Driver’s License
  6. Bank statement of the Business for a period of one year (for existing business)
  7. Sales Record for six months and operating expenses
  8. Evidence of availability of collateral Security (e.g. landed property, individual Guarantor

Note that the Federal Special Intervention Fund requires that you pledge an asset to secure your loan.  However, the bank also accepts other forms of security. Types of security the Bank accepts include:

  • Legal mortgage on a landed property (duly registered with Certificate of Occupancy)
  • Debenture on assets of the company
  • Bank guarantee
  • External Guarantors with Notarized statement of Net worth for loans below 10 million

HOW TO APPLY

Create an account on the website, login and click on register. Ensure you have all the necessary documents ready before you apply.

Once you’ve successfully applied, you’ll be given an Application tracking ID to help you track the progress of your application.

Read more on this series

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.