The Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) and the Bank of Industry (BoI) have signed a Memorandum of Agreement (MoA) for the pooling of N1billion to provide single digit interest rate to nano and micro enterprises in Nigeria. By this agreement signed in Abuja today (Wednesday), the two Federal Government-owned institutions are to deposit N500m a-piece into a Matching Fund Account to be managed by Bank of Industry.
Speaking during the signing ceremony, the Managing Director of Bank of Industry, Mr. Olasupo Olusi, observed that the journey to signing of the agreement has been difficult and challenging. He, however, noted that the signing of the agreement marked the beginning of many more fruitful relationships between the two organizations.
In his own remarks, the Director-General of Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), Mr. Charles Odii, commended the Managing Director of Bank of Industry and the Joint Technical Team that put the agreement together for the roles they played in making the relationship a reality. Mr. Odii described the signing of the agreement as “historic and a milestone” in the struggle to democratize access to finance for nano and micro enterprises in Nigeria.
Under the agreement, nano enterprises can access a maximum of N1.5million while micro enterprises can access a maximum of N2.5million. Loan applicants are required to provide two guarantors as part of the security for the loan. The tenor of the loan is 24 months. Working capital loan attracts 7.5% interest rate per annum while term loan attracts 5% interest rate per annum.
● By Levi Anyikwa, Director (Agribusiness Development & Extension Services Department), Small and Medium Enterprises Development Agency of Nigeria (SMEDAN)
