About Senator Abiru 6% p.a interest constituency revolving loan for MSME
Despite the emergence of the pandemic, businesses are gradually embracing the opportunities that were birthed as a result of the new normal.
Lagos East Senatorial district is home to numerous clusters of business hubs, factories, and industrial plants like Egbin Power Thermal Station, the largest power generating station in Nigeria.
From the metal/aluminum market in Ikorodu to the international perishable food market in Mile-12; from the printing hub/cluster in Somolu to the aquatic splendor for tourism, artisanal fishing, sandy beach, and coconut fringed Atlantic coastlines in Epe and Ibeju-Lekki; it is also home to several boundary communities with our neighbors, Ogun state.
The Micro, Small and Medium Enterprises (MSMEs) in Nigeria are very important and also integral to the growth of our economy as they contribute about 50% of our GDP and 80% of employment in the country. They stand the chance of changing the fortune of this great nation if well supported and they have an enabling environment to thrive, especially access to cheap funds for business growth and expansion.
We have however discovered that, because most of our MSMEs are unstructured and are not able to get commercial bank loans to do their businesses, they resort to ‘loan sharks’ who lend to them at exorbitant rate of interest ranging from 6% - 30% per month (i.e. 72% - 360% per annum) which is not sustainable.
To this end, on 14th November, 2021, in this same hall, the distinguished Senator, in partnership with The Fate Foundation and Standard Chartered Foundation, organized a one-day MSME Clinic/Workshop for over 1,000 MSMEs drawn across 98 wards in the 16 LGAs/LCDAs in the Lagos East Senatorial District.
The training attracted Executive Leadership of business-related regulatory agencies and partners like; BOI, SMEDAN, CAC, LIRS, NAFDAC, SON and LSETF amongst others who trained the MSMEs on various areas of business and also answered some of their pertinent questions during the one-on-one sessions. It was a capacity building clinic indeed.
In addressing the dearth of knowledge which is one of the major reasons why MSMEs fail, a knowledge pack containing seven valuable books covering areas like; Financial Management, Human Capital, Legal, Strategy, Marketing and Communication, Digital Technology and Tax Management authored by reputable corporations including Deloitte, KPMG, Verraki among others were given free of charge by the distinguished senator to all participants.
Participants also received Enterprise Development Certificates after the training.
At the said event, the distinguished Senator promised that he will do all within his power to set up a Constituency Revolving Loan at single digit of 6% per annum and he committed straightway to a sum of N100 Million to which the MD of Bank of Industry during his speech, also committed to match the same amount. We left the event with a promise of a loan size of N200 Million at 6% per annum.
In fulfillment of this promise, we have worked assiduously with all stakeholders and today have a starting loan size of N300 Million.
N100 Million from Bank of Industry, N100 Million from Small And Medium Enterprises Development Agency Of Nigeria (SMEDAN) and N100 Million from Lagos State Employment Trust Fund (LSETF) who are the Fund Managers. We expect this pot to grow as we move along and beneficiaries of the loans repaying as and when due.
The loans are in 4 categories and they are very easy to assess.
1. Nano Loans (N10,000 - N100,000)
- Up to 12 months repayment
- Only 5% equity contribution for Asset Loan
- Only Letter of Recommendation required from Association, Traditional Ruler or Civil Servant Level 16
- Minimal ID
- No Collateral
2. Micro Enterprise Start-up Loans (N50,000 - N250,000)
- Available to individuals who do not yet have a business but have received requisite training from a recognized vocational center
- Up to 12 months repayment
- Only 5% equity contribution for Asset Loan
- Minimal ID
- No Collateral
3. Micro Enterprise Loans (N50,000 - N500,000)
- For existing businesses that have been in operation for a minimum of one year
- These businesses are not well structured hence may not have CAC documents for the businesses
- Up to 12 months repayment
- Only 5% equity contribution for Asset Loan
- Minimal ID
- No Collateral
- personal or business bank statement
4. Small & Medium Enterprise Loans (N500,000 - N1,000,000)
- For existing businesses that have been in operation for a minimum of one year
- These businesses must be registered with CAC as business name of Limited liability company
- Up to 18 months repayment
- Only 5% equity contribution for Asset Loan
- Minimal ID
- No Collateral
- Business bank statement
