Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) Loan

It is the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) was established to encourage the growth of small enterprises across the country. SMEDAN was founded in 2003 as a result of the "SMEDAN Act".

SMEDAN is required to:

  • Facilitate, monitor and coordinate the growth of micro, small and medium-sized businesses (MSMEs)
  • Create and implement policies that are favourable to the development of MSMEs.
  • Participate in capacity-building
  • Assistance to MSMEs obtain access to credit and other types of financing

A flourishing MSME sector is seen as a means to combat poverty and the main factor in Nigeria's economic prosperity. As such, with its position being the "champion" for small-scale companies, SMEDAN can be considered a key driver of Nigeria's economy. Nigerian economy.

SMEDAN plays a role in helping small-scale enterprises through its head office in Abuja, as well as a number of other offices scattered across the country.

SMEDAN has a partnership with a range of partner institutions, such as, for instance, the Bank of Agriculture (BOA) and the Bank of Industry (BOI).

The types of loans and the funding are available from the Small and Medium Enterprises Development Agency.

The majority of the time, SMEDAN does not directly offer loans to companies. However, SMEDAN acts as an intermediary, connecting eligible small and medium-sized enterprises with appropriate lenders.

Read also : Federal Government loan for businesses.

There are some programs in which SMEDAN collaborates together with various government organizations, including BOI, BOI as well as the Central Bank of Nigeria (CBN), in offering credit to small-scale companies. However, SMEDAN primarily sticks to the training of entrepreneurs in business and development. The distribution of loans is controlled in other establishments, e.g. BOA, BOI, CBN etc.

In addition to credit from public institutions, SMEDAN can also assist small businesses with accessing loans from private lenders. For instance, financial houses, commercial banks, and microfinance institutions.

Eligible for the Small and Medium Enterprises Development Agency loan

All MSMEs are eligible for a loan through one of SMEDAN's numerous initiatives. The most common condition is that you are an officially registered company. But, non-registered companies are still eligible to apply to become registered later.

When you apply for a loan from commercial banks, as well as having to be registered as a business, The bank will be able to establish its own lending guidelines. SMEDAN can assist in making you aware of the major lending criteria for the vast majority of commercial banks.

How do I apply for a Small and Medium Enterprises Development Agency loan?

There are two methods to apply for a loan with SMEDAN. First, you can sign up for one of SMEDAN's training programs. In addition, you can make use of the credit information portal of SMEDAN before you directly apply for commercial bank loans.

Read also : CBN loan worth up to ₦2billion Naira.

Applying through SMEDAN

To get a loan, you need to apply for or become part of any of the SMEDAN initiatives sponsored by SMEDAN. These programs typically include you receiving training on a specific aspect of the business.

The registration process involves going to the SMEDAN office close to you. In the office, you will fill out an application form. You could be invited to attend a course or training course. SMEDAN also offers a brand-new MSME registration portal where you can apply online.

If you are able to successfully complete the course, some programs will grant you a conditional grant to help you start or expand your business, or you will be offered an uninvolved loan. Soft loans typically come at lower rates of interest to them and usually require no collateral.

However, regardless of whether you're awarded a grant or a loan, the majority of the time, you'll be required to have a registered company or be urged to sign up (as part of the grant program). In Nigeria, the Corporate Affairs Commission (CAC) is the body responsible for the registration of companies in Nigeria.

Based on the nature of the business, it is possible that you will need to be registered at your local Standards Organization of Nigeria (SON) as well as the National Agency for Food and Drug Administration and Control (NAFDAC).

Read also : Bank of Agriculture (BOA) Loan worth at least ₦5million.

A business plan also is required in order to outline the ways and purposes you intend to utilize the funds.

Making use of the SMEDAN Credit Information Portal -- prior to making an application to commercial banks

SMEDAN offers a Credit Information Portal -- which can be beneficial for those who want to apply for commercial bank loans. The portal basically functions as an information database on credit facilities which are for MSMEs in Nigeria.

On this site, you will find the basic information on lenders, the amount you can borrow, loan repayment times as well as the interest rate. In addition to the small business credit, you have three additional credit options personal loans, credit cards and mortgage loans.

The website offers a search function which allows you to be matched with suitable lenders depending on the information you supply. However, when using this platform online, it is not possible to apply immediately to an institution. Instead, you'll need to apply directly to the institution you're interested in.

Consider SMEDAN, the SMEDAN credit portal, as a more comprehensive credit information source -- as opposed to a way to apply for loans.

Read also : Nigerian Export-Import Bank (NEXIM) loan worth at least ₦10million.

Checklist for loan applications

A checklist of what's required before a loan with SMEDAN (or a commercial bank) is granted -- may include the following:

  • Application form completed
  • Business plan
  • Budget for cash flow
  • Certificate of Incorporation
  • Identification documents that are valid (driving license (passport, driver's license, voters card)
  • Address proof
  • The details of the collateral that is offered (if there is any)

Commonly inquired about questions (FAQs)

What is the time frame to receive money through the Small and Medium Enterprises Development Agency?

The time required to apply for a loan will vary depending on the specific program or credit facility you're applying for. After you have registered and applied with SMEDAN, it is necessary to undergo training and satisfy other requirements (e.g. registration of your business) prior to when a loan can be granted.

What is the time frame I must follow to repay a Small and Medium Enterprises Development Agency loan?

The time frame for repayment is contingent upon the program, as well as the credit facility that is being used. If loans are made, the route of SMEDAN is likely to be loans that are soft -- with favourable repayment conditions.

What's the rate of interest on the Small and Medium Enterprises Development Agency loan?

The rates for interest on loans made by SMEDAN vary. In general, the majority of loans are low-cost loans which have very little interest. Additionally, there are loans that are interest-free.

What is the maximum amount I can take out of the Small and Medium Enterprises Development Agency?

The amount of cash that could borrow from SMEDAN is comparatively minimal. If you need significant quantities of capital, it is recommended to apply directly to a commercial bankSMEDAN can help. SMEDAN will assist you in the process.

Read also : Development bank of Nigeria (DBN) loan worth at least ₦10million.

Do The Small and Medium Enterprises Development Agency provide grants?

It is true that SMEDAN offers a conditional grant. These grants are part of the various initiatives SMEDAN manages at times from time to time.

Is it true that this agency, Small and Medium Enterprises Development Agency, needs collateral?

In the majority of cases, SMEDAN provides unsecured loans, i.e. loans that don't require collateral. What you might be required to provide is the personal guarantee of a guarantor.

Other loan applications, which are made for commercial lenders, could require collateral.

What are the programs that the Small and Medium Enterprises Development Agency operate?

  • Automotive (Component Parts Fabrication) Empowerment Plan
  • Commercialization Empowerment Initiative (for ICT)
  • Conditional Grant Scheme (CGS)
  • Enterprise Network Initiatives
  • Financial Empowerment for MSMEs
  • Garment and Textile Cluster Growth Support Scheme
  • Hewlett Packard - Learning Initiative for Entrepreneurs (HP - Life)
  • Leather Cluster Enterprises Scheme
  • MSME Market Linkage Initiative
  • One-Local Government-One-Product (OLOP)
  • SMEDAN Cloud for MSMEs
  • The Waste-to-Wealth Cluster Growth and Enhancement Scheme
  • Young Business Owners in Nigeria (Y-BON)

Click here to apply to Small and Medium Enterprises Development Agency of Nigeria website.

Read also : Bank of Industry (BOI) loan.

Tags: Loan credit lending

Author : Kekeocha Justin