Nigerian government launches new single digit interest loan scheme for SMEs in bid to create jobs

NIGERIA'S federal government has approved a N75bn ($44.63m) loan scheme with a 9% interest rate for 75,000 small businesses as part of an ambitious programme to  kick-start the economy and create jobs.

With Nigeria's economy currently reeling from high unemployment, a 30% rate of inflation, a chronic scarcity of basis food items and escalating petrol prices that has made movement difficult. To combat the economic crisis, the federal government has decided to empower micro, small and medium enterprises (MSMEs), across Nigeria, to create jobs.

Scheduled for launch in 2025, this scheme aims to foster economic growth by targeting women and youth-owned enterprises, creating jobs and stimulating local economies. Information minister Alhaji Mohammed Idris, outlined the project’s goals at a town hall meeting in Abuja, noting its alignment with President Bola Tinubu’s Renewed Hope Agenda.

Alhaji Idris said: “This scheme is a concrete manifestation of Tinubu’s commitment to economic transformation. By focusing on MSMEs, which are the backbone of our economy, we aim to diversify income streams, boost exports and provide valuable job opportunities.”

According to the minister, the loans, which are a joint effort between the federal government, the Bank of Industry (BOI), and state governments, offers single-digit interest rates with individual borrowing capped at N1m. This move is expected to alleviate some of the challenges MSMEs face, particularly high production costs due to the recent fuel subsidy removal.

Anuli Akabogu, the BOI’s Enugu branch head, said: “The government understands the burdens MSMEs face and this fund is intended to ease the cost of production.”  BOI officials also stressed the importance of following the correct application procedures.

At the sensitisation event in Akwa Ibom, the state commissioner for trade and investment, John James, urged beneficiaries to prudently utilise the loans. He added:  “This is an opportunity to scale your businesses responsibly. MSMEs drive economies globally and we want the same for Nigeria.”

To reach potential recipients, government agencies like the Corporate Affairs Commission, Federal Inland Revenue Service and other partners have joined efforts, touring the nation to inform business owners of the application criteria. In Kaduna, Governor Uba Sani, represented by his special adviser on economic matters, praised President Tinubu’s dedication to economic empowerment.

He added: “This initiative proves Tinubu is a leader who listens to the needs of Nigerians. Through this, MSMEs will revitalise not just the local economy but bolster our national strength.”

Tola Adekunle-Johnson, senior special assistant to the president on job creation, cautioned applicants against fraud. He said: “This loan has a fixed interest rate with no hidden fees. Visit any BOI branch to apply directly, don’t fall victim to middlemen.”

To prevent abuse and prevent fraud, the scheme requires applicants to present key documents, including a federal civil service guarantor, to qualify. Mr Michael Agidani, BOI manager in Ogun State, added that the bank has already begun disbursing loans, with an initial N1bn reaching MSMEs in the state.