5 Loans That You Can Access After Completing SMEDAN Registration
By now you must have heard that SMEDAN has called for MSMEs in Nigeria to register on its portal. Completing your registration with SMEDAN comes with several benefits to these businesses; one such benefit is access to loans.
We all know how much trouble it is to raise capital to start up and run businesses. This should give you a picture of how helpful such loans will be to your business. In this post, we will discuss five loans that you can access after completing your SMEDAN registration.
About SMEDAN and the MSME Registration
The Federal Government of Nigeria established SMEDAN in 2003 to help in developing MSMEs in Nigeria. SMEDAN is an acronym for Small and Medium Enterprises Development Agency of Nigeria. Some of the objectives of this organisation include coordinating MSMEs, developing helpful policies, and promoting programs to aid MSMEs.
SMEDAN’s latest initiative requiring MSMEs to register is based on its objectives. This program requires these businesses to register with SMEDAN to help with creating a database for the body. Examples of businesses eligible for this registration include tailors, artisans, restaurant owners, etc.
This registration program exposes business owners to certain benefits, including:
a. SMEDAN certificate.
b. The conditional grant scheme from SMEDAN.
c. Training programs.
d. Business loans from different bodies.
e. Unique Identification Number.
f. Business Insurance.
Click here to see who is eligible for the SMEDAN MSME Registration Program.
Loans That You Can Access After Completing Your SMEDAN Registration
One of the benefits that you enjoy from registering with SMEDAN is access to business loans. SMEDAN acts as a bridge between MSMEs and financing bodies. Such bodies include the Federal Government, Government Agencies, and private financial institutions. In this section, we will take a look at some loans that you can access after completing your SMEDAN registration.
The Central Bank of Nigeria is the Apex Bank of the country. Its position as the bank of banks means that it has made provision for businesses to access loans. The CBN does not provide loans to businesses directly. Instead, it gives loans through other bodies. One such body is SMEDAN.
SMEDAN handles the disbursement of CBN loans to small and medium business enterprises within the country. To access these loans, you need to take the following steps:
a. Complete your SMEDAN MSME registration.
b. Open the Credit Information Portal on the SMEDAN website.
c. Click on Access Loans and choose any of the loans available. These include personal, business, mortgage, and credit card loans.
d. Submit the required information.
e. Check loan availability.
f. Submit your loan application.
One of the advantages of this loan is that the interest rates are very low.
Bank of Industry Loans
The Bank of Industry is a major development financier set up by the government in conjunction with the CBN. It is also known as the BOI, and it has a mandate of making financial assistance available to MSMEs. This bank is not a commercial bank; instead, it targets SMEs categorised under manufacturing and processing.
Who can access BOI loans? These are the criteria that you must satisfy to get a loan from BOI:
a. You must be classified as an SME.
b. The company must be new or existing and must be seeking modernisation, expansion, or diversification.
c. Credit-worthy individuals that can contribute a minimum of 25 percent of a project cost.
d. Borrowers with proven character and reputation.
e. Clients that demonstrate the ability to repay loans.
f. Borrowers with perfect credit scores.
The BOI works in conjunction with SMEDAN for the disbursement of its loans. This means that businesses that are registered under SMEDAN enjoy preferential treatment regarding this loan.
Bank of Agriculture Loans
The Bank of Agriculture, popularly known as the BOA, is another finance institution focused on development. In this case, the body provides loans to businesses in the agricultural sector. The BOA is owned and controlled by the Federal Government of Nigeria.
This bank offers two major types of loans. The first is the agricultural loan that is designed to cater to SMEs in the agricultural sector. This implies that all the SMEs across the Agriculture Value Chain are eligible for this loan.
The second loan provided by the BOA is the microloan. This is credit financing for both agricultural and non-agricultural business activities. Just like the name implies, it is provided for micro activities. As such, it is given to arable farmers, artisans, traders, livestock farmers, etc.
Just like the other loans that you get through SMEDAN, this loan has a low-interest rate. The challenge here is that you need collateral for this loan. However, when you register with SMEDAN, you are liable for preferential treatment.
Commercial Bank Loans
Asides from giving you access to funding from the government, SMEDAN registration also provides funding from commercial banks. One of the objectives of SMEDAN is to stand as a bridge between businesses and financiers.
Accessing this loan is not as complicated as the others. You can simply walk into your commercial bank and request that you will like to apply for a SMEDAN-powered loan. You will be given a form to fill, and if the bank is satisfied with the reason, they will forward your request.
SMEDAN has made it easy that you can even apply for the loan via its Credit Information Portal. It is important to let you know that these loans have higher rates than loans from the government.
Loans from International Financiers
SMEDAN has links to foreign bodies that are open to investing in the Nigerian economy. Such investors may be private, governments, or NGOs. Whichever they are, SMEs that register with SMEDAN get wind of such information and can submit their application.
Do you now see why the SMEDAN registration is so important? Why not take the time to complete your registration today. The process is easy and quick, as well. Click here to complete your SMEDAN MSME registration.