How to Access Several Intervention Funds in Nigeria

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Research has shown that one of the major causes of failures for SMEs is lack of funding.

Many entrepreneurs are being faced with financial challenges in the early phase of their businesses; this is why different intervention funds in Nigeria have been set up.

Most of these intervention funds in Nigeria are granted to the beneficiaries at an interest rate of 9%, and for a duration of between 5 to 10 years. Also, these intervention funds for SMEs in Nigeria have cut down on the collateral requirements. 

In place of this, there is room for guarantees from third parties and also educational credentials.

However, a considerable number of SMEs in Nigeria are oblivious to the existence of these intervention funds. For those who know they exist, gaining access to them might be quite a daunting task.

Below is a list of intervention funds in Nigeria and how you can access them.

  1. Commercial Agriculture Credit Scheme (CACS)

The Commercial Agriculture Credit Support Scheme is a Federal Government initiative with its primary focus being the development of the country’s agricultural sector. The Central Bank of Nigeria is implementing this intervention fund.

Its goal is to reduce the inflation of food, increase its production, and help achieve price stability goals.

Who is Eligible?

This fund is open to commercial-scale farmers and all enterprises involved in agricultural production. Under this Scheme, the state government can borrow as much as N1 billion. 

Afterward, they can lend to farmer cooperatives and other sectors involved in agricultural production. This rule applies as long as their activities are in sync with the Scheme’s objectives.

How to access the fund

Qualified applicants should apply through commercial banks in which the funds have been made available. The purpose of this should be strictly for agricultural enterprises. For this fund, the interest rate is at 9% per annum.

  1. Micro, Small and Medium Enterprises Development Fund (MSMEDF)

The MSMEDF is another on the list of intervention funds in Nigeria. This intervention fund was established way back in 2013. It empowers microfinance institutions under the Scheme with funds that they later lend out to eligible SMEs in Nigeria.

It comes with an initial seed of N220 billion, with 90% channeled towards commercial component and the remaining 10% for development component.

Out of the 90% for commercial components, 60% goes to funding female entrepreneurs. The reason for this is to promote women’s access to funds.

In a bid to promote a sound and reliable financial system in the country, the Central Bank of Nigeria launched the MSMEDF for SMEs in Nigeria. This launch happened on the 15th of August, 2013, and has since become one of the best intervention funds in Nigeria.

Who is Eligible?

This intervention fund is made available to SMEs in Nigeria, cutting across hairdressers, tailors, traders, cooperative societies, amongst several others. It comes with a maximum interest rate of 9% per annum.

For micro-enterprises, up to N500,000 can be accessed per cycle. For SMEs being sponsored by finance companies and Deposit Money Banks, up to N5,000,000 can be obtained per cycle.

How to access the fund

Accessing the MSMEDF requires participants first to create an account relationship with any PFI – Participating Financial Institution. After indicating interest, your PFI will provide all necessary guidelines and documentations.

Joining a cooperative society makes accessing this fund even easier. This is because Microfinance Institutions, more often than not, would instead work with a group than an individual for the sake of risk management.

  1. The Bottom of the Pyramid (BOP) Scheme

The BOP scheme has a fund size of N15.9 billion, which SMEs in Nigeria can benefit from significantly. It is a fund pulled out from three sources – The Bank of Industry, the Dangote Foundation, and Matching Funds pulled from about 15 states.

The Bank of Industry Scheme lends to beneficiaries through qualified microfinance banks.

Who is eligible?

This Scheme is available to micro-entrepreneurs engaged in activities related to agriculture, cottage, and solid minerals.

Eligible applicants can access as much as N250,000 with a maximum interest rate of 9% in like 36 months.

How to access the fund

For SMEs in Nigeria interested in this fund, the first thing to do is identify Microfinance Banks participating in the Scheme. The bank will then walk you through the entire process; that is, if you are qualified.

  1. Real Sector Support Fund (RSSF)

The Real Sector Support Fund was launched in 2015 to support the expansion of the real sector. With a fund size of N300 billion, the Central Bank of Nigeria established this intervention fund to increase the real sector’s output.

Who is eligible?

For any SME in Nigeria in need of this fund, it must first identify as an SME or a manufacturer. Other eligibility criteria include: 

  • Any business being run legally as a sole proprietorship and is a member of relevant associations such as NASSI, MAN, and NASME, amidst others
  • Any unit that is owned and being run by a private limited company in Nigeria, and also registered under the Companies and Allied Matters Act of 1990.

How to access the fund

The RSSF offers funding at a minimum of N500 million and a maximum of N10 billion for an applicant.

To access this loan, you must meet up with all criteria for eligibility. Also, have a meeting with your bank manager to indicate your interest. 

Afterward, the bank will carry out all required Know Your Customer (KYC) to ascertain your eligibility and help with the application process.

Intervention funds in Nigeria enable SMEs and other sectors in the economy to grow their businesses. All it takes is to understand how each intervention fund scheme works and which will suit your business needs appropriately. 

1 Comment
  1. ปั้มไลค์ says

    Like!! I blog quite often and I genuinely thank you for your information. The article has truly peaked my interest.

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