✓ MSMEDF: Viable loan source for your SME small business in Nigeria

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BigCh1ld
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#1

 

The MSMEDF (Micro, Small & Medium Enterprises Development Fund), introduced bty CBN is a viable source of finance for small businesses in Nigeria. However, information is power. And I have brought useful data about the MSMEDF.

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Two years ago, the Central Bank of Nigeria (CBN) introduced the MSMEDF and set guidelines to direct low-yielding funds to MSMEs through participating financial institutions to improve their access to financial services.

These guidelines are set for new businesses, business growth, and reviving struggling companies, and they align with the provisions of the Banks and Other Financial Institutions Act (BOFIA (1991) and the principles of Non-Interest Financial Institutions (NIFIs).

The goal is to increase the productivity and output of these micro-enterprises, create jobs, and promote inclusive growth.

Prospective borrowers can approach Participating Financial Institutions (PFIs) of their choice to apply for the Micro Small and Medium Enterprise Development Fund (MSMEDF).

PFIs: Participating Financial institutions
These financial institutions serve two groups: Micro entrepreneurs and SMEs-

Micro entrepreneurs (i. e. borrowers seeking loans of less than N500,000) are to approach any of the four institutions:
Microfinance Banks
NGO/Microfinance Institutions
Financial Cooperatives
Finance Companies

Small and Medium Enterprises (SMEs): Prospective borrowers seeking between N500,000 and N50million.are to approach any of these institutions:
Deposit Money Banks
Bank of Industry (BOI)
Bank of Agriculture

Types of businesses that can be financed under the Fund
Agricultural value chain activities,
Manufacturing & Cottage Industries,
Artisans,
Services,

Trade and general commerce,
Renewable energy or energy-efficient products and technologies, and
Any other income-generating projects as may be prescribed by the CBN.

Important information borrowers need to know
Prospective borrowers are to provide the required documents including collateral for SME loans;

PFIs will appraise loan applications, approve and forward loan requests of borrowers to the CBN for the release of funds;
MSMEDF will only release funds to borrowers through the PFIs;

The account of benefitting borrowers shall be credited by the PFIs within 5 working days upon the release of Funds by MSMEDF to the PFI;
Loans shall be granted at an interest rate of 9.0% per annum (all charges inclusive) irrespective of the type of eligible activity financed;

Borrowers shall be expected to pay back all loans as and when due inclusive of any accrued interest to the PFI; and
The MSMEDF/CBN will recycle all fully repaid loans transferred to it by the PFIs.

Learn more from the CBN MSMEDF guidelines at https://www.cbn.gov.ng/MSME/FAQ_MSME.asp
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Dominic
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Getting a loan to startup a small scale business it not that encouraging

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Jared
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#3

 

Dominic wrote: November 7th, 2023, 6:46 am Getting a loan to startup a small scale business it not that encouraging
But information is power. There are many options out there.

Maybe you can share a question in the QA section about your specific needs, see how much options you get with answers.
Financial Literacy is the possession of knowledge, skills and behavioral traits that help an individual make informed decisions regarding money. 💰


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Jared
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Dominic wrote: November 7th, 2023, 6:51 amGood
There are even organisations and investors out there ready to invest in your bright startup ideas with hundreds of millions of Naira.

There's a topic on Azà on this. Search.
Financial Literacy is the possession of knowledge, skills and behavioral traits that help an individual make informed decisions regarding money. 💰





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