BoI, SMEDAN To Issue Loans to Small Businesses

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BoI, SMEDAN To Issue Loans to Small Businesses
BoI, SMEDAN To Issue Loans to Small Businesses

A Memorandum of Agreement (MoA) has been struck by the Bank of Industry (BoI) and the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) to pool N1 billion to offer single-digit lending rates to nano and micro enterprises in Nigeria.

The two federally owned institutions are required by the agreement, which was signed in Abuja yesterday, to contribute N500 million apiece to a matching fund account that will be overseen by the Bank of Industry.

At the signing ceremony, Olasupo Olusi, Managing Director of BOI, disclosed that the journey to signing the agreement has not been all bed of roses as it is accompanied by lots of challenges.

Adding, he noted that the signing of the agreement marked the beginning of many more fruitful relationships between the two organizations.

During his speech, Charles Odii, the Director-General of SMEDAN (The Small and Medium Enterprises Development Agency of Nigeria) praised the efforts of the joint technical team and the Managing Director of the Bank of Industry in bringing the relationship to fruition.

Continuing, Odii called the agreement’s signing historic and a turning point in the fight to give Nigerian nano and microbusiness owners more democratic access to capital.

Still, under the agreement, nano enterprises can access a maximum of N1.5 million while micro-enterprises can access a maximum of N2.5 million.

According to a statement from Levi Anyika, director of SMEDAN’s Agribusiness Development and Extension Services Department, loan applicants must give the statements of two guarantors as part of the loan’s security.

However, the tenor of the loan is 24 months while a working capital loan attracts a 7.5 percent interest rate per annum; a term loan attracts a five percent interest rate per annum.