FG SMEs

FG to support MSMEs with $1bn syndicated loan

by with No Comment Businessfinance

As part of efforts to boost Nigeria’s economic recovery and sustainable growth, the Bank of Industry (BoI) under the supervision of the Federal Ministry of Industry, Trade and Investment has concluded a $1billion syndicated term loan in conjunction with international partners to further support Small and Medium Scale Enterprises (MSME) in the country.

READ ALSO: BusinessDay with NetPlusDotCom Set to Host March Edition of Monthly Digital Webinar Series for SMEs

Minister of Industry, Trade and Investment, Otunba Adeniyi Adebayo, said the loan is aimed at “further improving the capacity of the bank to effectively support Micro, Small and Medium Scale Enterprises (MSME) – across key sectors of the Nigerian economy – with affordable loans of medium to long-term tenor, alongside moratorium benefits.”

Adebayo who disclosed this on Monday at the Quantum Mechanics Limited MSME Survival Fund capacity building programme in Abuja, also said discussion were ongoing with Dunn & Bradstreet to establish an SME risk rating agency – the SME Rating Agency of Nigeria (SMERAN), to provide empirical basis  for analysing the eligibility of SMEs to access credit.

The Minister who spoke on efforts of the Federal Government at supporting MSMEs in the country said, “I will like to reiterate that our Ministry fully supports MSMEs, as demonstrated by our MSME Survival Fund Initiative launched in the wake of the COVID-19 pandemic by the Federal Government as part of the Nigerian Economic Sustainability Plan (NESP); aimed at protecting MSME businesses from shocks the pandemic. The Fund comprises the Payroll Support Scheme which aims to support MSMEs in meeting their payroll obligations and safeguard jobs by paying up to N50,000 to a maximum of 10 employees in each MSME for three months; the Artisan and Transport Grant which supports self-employed artisans with a one-off payment of N30,000 targeting 333,000 individuals; the General MSME Grant which will provide 100,000 MSMEs with one-off grants of N50,000 each; and the Guaranteed Offtake Scheme which will engage approximately 100,000 businesses across the country to produce items typically manufactured in their locality, targeting 300,000 beneficiaries, including free registration of companies for 250,000 beneficiaries.”

He explained that the survival fund was estimated to save at least 1.3 million jobs across the country…

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Artisans

FG Set To Give N30,000 Loan To 330,000 Artisans

by with No Comment Business

FG Set To Give N30,000 Loan To 330,000 Self employed Artisans

Minister of Industry, Trade and Investment, Adeniyi Adebayo disclosed on Monday at the Quantum Mechanics Limited MSMEs Survival Fund capacity building programme in Abuja that the Bank of Industry has secured a $1 billion syndicated loan to support Micro, Small and Medium Enterprises (MSMEs), self employed artisans.

READ ALSO: BOI $1bn loan will improve capacity of MSMEs

Mr. Adebayo, in a statement by his media aide, Ifedayo Sayo, said the loan would improve the bank’s capacity to support MSMEs across key sectors of the Nigerian economy.

“There is an ongoing discussion with Dunn and Bradstreet to establish an SMEs Ratings Agency of Nigeria (SMERAN) to provide an empirical basis toward analyzing the eligibility of SMEs to access credit.

The minister, who spoke on efforts of the federal government to support MSMEs in the country, also reiterated the ministry’s support to MSMEs development as demonstrated by the MSMEs Survival Fund Initiative, launched in the wake of the COVID-19 pandemic by the government as part of its Nigerian Economic Sustainability Plan.

“The fund comprises the Payroll Support Scheme, which aims at supporting MSMEs in meeting their payroll obligations and safeguard jobs by paying up to N50,000 to a maximum of 10 employees for three months.

“The Artisan and Transport Grant supports self-employed artisans with a one-off payment of N30,000 targeting 333,000 individuals,” Mr. Adebayo explained.

He stated further, “The General MSMEs Grant will provide 100,000 MSMEs with one-off grants of N50, 000 each, and the Guaranteed Off take Scheme aims at engaging approximately 100,000 businesses nationwide to produce items typically manufactured in their locality, targeting 300,000 beneficiaries.

“The scheme supports free registration of companies for 250,000 beneficiaries.”

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FG MSMEs

BOI $1bn loan will improve capacity of MSMEs

by with No Comment Businessfinance

BOI $1bn syndicate loan will improve capacity of MSMEs- FG

The Federal Government has revealed that the Bank of Industry (BoI) under the supervision of the Ministry of Industry, Trade and Investment has concluded a $1billion syndicated term loan in conjunction with international partners to further support Small and Medium Scale Enterprises (MSMEs) in the country.

READ ALSO: Inflation tops discussion as MPC meets today

Disclosing this in Abuja, on Monday, at the Quantum Mechanics Limited MSMEs survival Fund Capacity Building, the Minister of Industry, Trade and Investment, Otunba Adebayo, said the loan is aimed at “further improving the capacity of the bank to effectively support Micro, Small and Medium Scale Enterprises (MSME) – across key sectors of the Nigerian economy – with affordable loans of medium to long-term tenor, alongside moratorium benefits.”He noted that “there is an ongoing discussion with Dunn & Bradstreet to establish an SME risk rating agency – the SME Rating Agency of Nigeria (SMERAN), to provide an empirical basis towards analysing the eligibility of SMEs to access credit.

“I will like to reiterate that our Ministry fully supports MSMEs, as demonstrated by our MSME Survival Fund Initiative which was launched in the wake of the COVID-19 Pandemic by the Federal Government as part of the Nigerian Economic Sustainability Plan (NESP); aimed at protecting MSME businesses from the shocks the Pandemic.”The Minister explained that the survival fund was estimated to save at least 1.3 million jobs across the country while strengthening the growth potential of beneficiary businesses, stressing that the successful implementation of the scheme so far has contributed immensely to quickly pulling Nigeria out of the COVID-19-induced recession.

He said the National MSMEs Clinics also support the growth of small businesses across the country through the provision of critical infrastructure, with twenty-six of such clinics having impressive results.

According to a statement made available to newsmen by Ifedayo Sayo, Adebayo further disclosed that the Nigerian Export Promotion Council (NEPC) has launched the Export Expansion Facility (EEF) under the NESP, to support the resilience of new and existing MSMEs to respond to the shocks of the COVID-19 Pandemic to retain and create more jobs, especially youth and women businesses through the Youth Export Development Programme (YEDP) and Promoting Women Inclusiveness in Non-Oil Export.

SOURCE

SMEDAN

SMEDAN opens N5m loan application portal for SMEs

by with One Comment Business

The Small and Medium Enterprises Development Agency of Nigeria, SMEDAN, says it will open its portal Tuesday for receiving applications from small business owners for N1.2 million to N5million loans.

READ ALSO: MTN EnGauge Platform Unveils to Transform SME Business Transactions

The Director-General and Chief Executive Officer of SMEDAN, Dikko Radda, in a statement issued by the Corporate Affairs Unit of the Agency, said the loans would be funded from the SMEDAN-BOA Matching Fund Programme for small businesses.

Mr Radda said the opening of the programme portal would be a promotional intervention meant to deliver credit to the small businesses to enhance enterprise output, competitiveness and jobs creation.

He also stated that the disbursing entity, under the programme, shall be the Bank of Agriculture, BOA.

“Target beneficiaries for this programme shall be labour-intensive micro or small enterprises (MSEs), operating in the real sector.

These shall ideally be innovative value-added products that are establishing footprint in the Nigerian market, and require additional funds to increase output,” the Director General said.

He, therefore, called for applications from all suitably qualified micro, small enterprises located in the Federal Capital Territory, FCT, Kaduna and Oyo states to apply for the programme.

Mr Radda added that prospective beneficiaries, who must be registered with SMEDAN, would get the loans on business-friendly terms, including waiver of collaterals.

SOURCE LINK

SEC, AFDB

AfDB provides $400,000 grant for Nigeria’s SEC

by with No Comment BusinessfinanceNews

The African Development Bank Group has signed a $400,000 grant agreement with the Securities and Exchange Commission of Nigeria to strengthen securities markets regulation and broaden market instruments.

READ ALSO: CBN extends interest rate cut on pandemic loans

The funds will go towards strengthening risk-based supervision framework, regulation of derivatives and green bonds, and build capacity for green finance. The grant will be sourced from the Capital Markets Development Trust Fund, a multi-donor fund administered by the Bank. AFDB

“This collaboration further underscores our mutual goal to grow our markets and create viable avenues for sustainable economic development for Nigeria and the region,” said Lamido Yuguda, Director General of the Securities and Exchange Commission at the virtual signing ceremony.

The grant is aligned with the priorities of the Bank’s Country Strategy for Nigeria, which envisages measures to stimulate capital market development to unlock financial resources for productive sector investments, infrastructure development and private sector growth.

The project will reinforce the implementation of SEC’s Nigeria Capital Market Master Plan 2015-2025 and its vision to position the Nigerian capital market as a competitive and attractive destination for portfolio investments.

Lamin Barrow, Senior Director of the Bank’s Nigeria Country Department, (AFDB) noted the urgency for speedy implementation of activities contemplated in this project.

“At a time when countries are striving to build back better from the ravages of the COVID-19 pandemic, improvement of the enabling regulatory and supervision framework will boost domestic resource mobilisation efforts and leverage private sector contributions to achieve a greener, more environmentally sustainable and inclusive post-pandemic recovery” Barrow added.

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CBN

CBN extends interest rate cut on pandemic loans

by with No Comment financeNews

The Central Bank of Nigeria’s (CBN) extension of the interest rate it reduced during the pandemic (officially known as discounted interest rate) by another 12 months is seen as a big boost for an economy licking its wounds from the recession, most analysts polled by BusinesDay said.

READ ALSO: Brent moves towards $70 as Goldman Sachs raises Q2’21 forecast to $75

Discounted interest rate is a rate charged by the monetary authority, in this case, the CBN on the deposit money banks.

On March 1, 2020, the CBN reduced the interest rates on its intervention funds from 9 percent to 5 percent per annum for a one-year period.

READ ALSO: Farmers benefit from CBN Anchor Borrower program

The reduction was part of measures to mitigate the negative impact of the COVID-19 pandemic on the Nigerian economy. One major impact of the intervention was in the management of Non-Performing Loan (NPL) in the banking system.

Although the banking sector NPLs rose to 6.01 percent at the end of December 2020 from 5.88 percent at the end of November 2020 and above the prudential maximum threshold of 5.0 percent, analysts said it would have been worse than this if not for the discounted facilities and moratorium for banks and other financial institutions.

Akintunde Olusegun, analyst at Polaris Bank Limited, said extending the discounted rate was good for the economy as the COVID-19 pandemic was still on. Most businesses affected have not recovered, and ending it now would not have helped those businesses.

He said the CBN acted in the right direction, noting, “It gives the companies the opportunity to rebound. The impact of the previous discounted rate could be seen on the GDP, which came against the predictions of most economists and the IMF. Surprisingly, Nigeria exited recession.”

The extension followed the positive impact recorded in the first discounted intervention facility in 2020. Borrowers of the facility were majorly the manufacturers and agribusiness operators.

Data from FBNQuest showed that the Manufacturing Purchasing Managers Index (PMI) made a good recovery from 44.5 to 53.0 in February 2021. The good recovery was driven by medium-sized and small firms.

According to Ayodeji Ebo, head, retail investment, Chapel Hill Denham, it is a positive development. It will help the banks in managing NPL. If it is positive, it gives them leeway. The discounted rate for the CBN intervention facility last year provided support to most companies, especially, in the real sector. It helped in the increase in crop production and reduction in cost of fund.

The National Bureau of Statistics (NBS) report showed that agriculture contributed 24.23 percent to nominal GDP in the fourth quarter of 2020, higher than the rates recorded for the fourth quarter of 2019, but lower than the third quarter of 2020, which recorded 23.38 percent and 28.41 percent, respectively. The annual contribution of agriculture to the nominal GDP in 2020 was 24.45%. Crop production sector grew by 3.68% in Q4 2020 from 1.38% in Q3 2020 and 2.52% in Q4 2019.

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CBN

CBN extends forbearance for intervention loans by another 12 months

by with No Comment financeNews

The Central Bank of Nigeria (CBN) has announced an extension of its regulatory forbearance for the restructuring of its intervention facilities by another 12 months.

READ ALSO: Nigeria’s equities market loses over N200bn in 4 days

In a circular signed by Dr. Kevin Amugo, the Director of Financial Policy and Regulatory. the apex bank said it will continue to charge its borrowers an interest rate of 5% per annum as against the 9% originally offered.

The CBN had on March 20th reduced the interest rates on its intervention loans from 9% to 5% as part of its response to the economic crunch brought on by Covid-19 induced lockdowns.

The banking sector regulator also offered to rollover moratorium granted on all principal payments on a case by case basis. All credit facilities had been granted a one-year moratorium starting from march 1, 2020 when the pandemic first gripped Nigeria.

Below is excerpt from the circular:

“The Central Bank of Nigeria reduced the interest rates on the CBN intervention facilities from 9% to 5% per annum for one-year effective March 1, 2020, as part of measures to mitigate the negative impact of COVID-19 Pandemic on the Nigerian economy.”

Credit facilities, availed through participating banks and OFIs, were also granted a one-year moratorium on all principal payments with effect from March 1, 2020.

Following the expiration of the above timelines, the CBN hereby approves as follows:
1) The extension by another twelve (12) months to February 28, 2022 of the discounted interest rate for the CBN intervention facilities;

2) The roll-over of the moratorium on the above facilities shall be considered on a case by case basis.

SOURCE LINK

IMG-20200901-WA0016

His Excellency, Rt. Hon. Ifeanyi Ugwuanyi through the Enugu SME Center flags off a loan partnership program with VFD Microfinance Bank

by with One Comment Enugu SME News

The Executive Governor of Enugu State, His Excellency, Rt. Hon. Ifeanyi Ugwuanyi through the Enugu SME Center has flagged off a partnership with VFD Microfinance Bank, the first of its kind in Nigeria, to provide soft loans and financial literacy training to palliate the effect of the pandemic on Students in Higher Institutions, New graduates, and NYSC
Members that run or own their own businesses.

Under this new financial scheme termed “Enugu Studentpreneur Development Loans, ” eligible applicants can now access soft loans up to One Hundred and fifty thousand naira (N150,000.00) from our partner @vbankng

Loan Terms:
*Interest rate: 9% per annum

*Duration: 6months (subject to renewal)

*Every business is eligible, with or without Corporate Affairs Commission Certificate.

Signed,
Hon. Arinze Chilo-Offiah (@arinzechilo_ )
Special Adviser, SME Development
Head, Enugu SME Center

#Gburugburuissme#ESDL#loans#Enugustudentpreneurloans#businesssupport#Gburusyouth#Esmeimpact

loans-approved

Business Loan: Advantages and Disadvantages

by with No Comment Businessfinancestartup tips

Business loans serve as a powerful tool to help fund, launch, and grow a small business. As a small business owner, you may be looking to secure financing to maintain business operations, expand locations, invest in new equipment, or hire more employees. A business loan helps you achieve all this.

Not sure if a business loan is right for you? In this article, we break down the advantages and disadvantages of taking out a business loan, as well as questions to ask yourself if you’re still overwhelmed.

Advantages of Borrowing


Receive an influx of cash to grow your business
The easiest and most obvious way to gain major cash flow is to take out a business loan. If your business is at a stage where it’s ready to launch, expand, or grow its operations, business loans are a good choice. Compared to other funding options, you access a relatively large amount of capital for multiple purposes.

Maintain control of your business
Unlike borrowing equity (where business issues shares), taking out a business loan from the bank provides you full control over your business. Banks don’t get involved in any aspect of running your business, which means as a business owner—you retain full control and management over your company’s operations, while still reaping the benefits of extra cash.

Interest is tax-deductible
The words “tax-deductible” probably ring in your ears: it’s great news. Interest on your business bank loans is tax-deductible. This is particularly so with fixed-rate loans, in which the interest rate does not change throughout the course of your loan. This makes it much easier for small business owners to budget and plan for monthly loan payments!

Disadvantages of Borrowing


Tough to qualify
Unless you’re a small business owner with a considerable track record of valuable assets (i.e. real estate), then, unfortunately, it’s highly difficult to obtain business loans. Like applying for a mortgage, banks are extra careful with lending. They want to make sure that you can pay them back. Often, borrowers must provide the bank some sort of guarantee, such as having their personal assets seized in the event the business fails and is unable to repay all or part of a loan.

High-interest rates
Another disadvantage of small business loans is high-interest rates. In addition to that, often the amount a business qualifies for is also not enough to meet a company’s needs.

Borrowing money at a high-interest rate serves as a disservice for the business, as it often has to deal with the business loan and additional funding to cover funds not provided by the bank.

Questions to ask when considering a business loan
Borrowing money for your business comes with its pros and cons—as with any business decisions that involve money. If you are still unsure about whether a business loan is right for you, here are several questions to reflect on:

  • How much funding do I need?
  • What is the timeline in which I need the money?
  • Do I qualify for lender requirements?
  • And if so, how do I plan to spend the money?