Have you ever thought about getting a loan from the Central Bank of Nigeria (CBN) for your business?
It may not be the first place that comes to mind, but the CBN offers a number of low-interest, flexible repayment schemes for MSMEs (micro, small, and medium-sized enterprises).
In this article, we’ll take a closer look at some of the CBN’s loan schemes and explain how you can apply for them. But first, let’s get a basic understanding of how CBN loans work.
A CBN loan is like a helping hand for businesses of all shapes and sizes across Nigeria. It’s there to offer affordable financing so you can keep your business dreams rolling.
CBN loans are appealing to businesses because of their low-interest rates and the ample time you get to pay back what you borrow.
But here’s the thing: not all CBN loans are up for grabs. They come in different types, tailored to specific sectors and business sizes. So, you’ve got to pick the one that suits your business.
Also, CBN doesn’t hand the loans to businesses directly. Instead, they pass the funds to Partnering Financial Institutions (PFIs) like banks and microfinance institutions, who in turn pass on the money to businesses like yours.
You can apply for a CBN loan to increase your working capital, buy new assets for your business, expand your business, or supercharge your marketing efforts.
So, when you think of CBN loans, think of it as that friendly neighbour who’s ready to help your business thrive.
Now that you understand what CBN loans are and how they can give your business a boost, let’s jump into the different types of CBN loans you can apply for.
The Agri-Business Small and Medium Enterprises Investment Scheme (AGSMEIS) was set up to give a helping hand to the growth of the agricultural sector and businesses connected to it in Nigeria.
Since its kickoff, the CBN has put in a substantial N136.13 billion into this scheme.
So, what does the AGSMEIS loan offer your business? Well, you can:
Now, you might be wondering if your business qualified for the AGSMEIS. Chances are, it does if you’re involved in:
The Anchor Borrowers Programme (ABP) was launched in November 2015 to link smallholder farmers (SHFs) with reputable companies (anchors) that produce and process key agricultural commodities.
Since then, the CBN has disbursed funds to over 4.2 million SHFs in Nigeria. Here’s the cool part: The program usually appoints anchor borrowers who act as go-betweens for the farmers and the banks. They’re like the friendly bridge that makes everything smoother.
Once a farmer gets the green light for an ABP loan, the PFI wires the cash into their account. The farmer can then use this money to buy the stuff they need from the anchor company.
When the growing season wraps up, it’s payday for the farmer. They sell their harvest to the anchor company at a price they both agreed on before.
Then, like a true friend, the anchor company takes care of repaying the loan on the farmer’s behalf.
To be eligible for an ABP loan, farmers must:
The Youth Entrepreneurship Development Program (YEDP) is a loan program designed to assist young Nigerians in launching small and medium-sized businesses.
Businesses of all types can apply, however, the program is focused on businesses in the following sectors:
Now, let’s delve into the loan details:
If you meet the requirements, you will be shortlisted to receive training from any of CBN’s Entrepreneurship Development Centers (EDCs). You will also be asked to bring:
The Maize Aggregation Scheme (MAS) was created to help feed millers, poultry farmers, silo and warehouse operators, and confectionery companies get easy access to affordable credit.
The key features of the Maize Aggregation Scheme are:
Who’s this scheme for? You qualify for the MAS scheme if you are a:
The CBN rolled out the MSME Development Fund in 2013, with a clear mission in mind – to make it easier for those small and medium-sized businesses (MSMEs) to get their hands on financial services.
Now, this fund isn’t limited to just one thing; it covers a wide range of eligible activities, such as:
Now, let’s dive into the finer details of this loan:
The Creative Industry Financing Initiative (CIFI) is an amazing chance for creative entrepreneurs to get long-term, low-interest loans for their projects.
These loans are designed specifically for people who work in different creative fields, such as fashion, IT (including student software development), movie production, and music production and distribution.
Here’s a quick overview of the loan details:
To qualify for the Creative Industry Financing Initiative, you and your business must:
The Central Bank of Nigeria (CBN) teamed up with universities and polytechnics to form the Tertiary Institutions Entrepreneurship Scheme (TIES) for graduates.
So if you’re a university or polytechnic graduate with dreams of starting your own business, you can tap into this loan program.
The TIEF loan has a 9% annual interest rate, starting at 5 million Naira if you are a solo entrepreneur or 25 million Naira if you are a partnership. But here’s the catch, you’ve got five years to pay it back.
You also have a high chance of getting picked if your business falls under these sectors:
To be eligible for this loan, you must provide the following documents:
At this point, you are probably wondering how you can apply for a Central Bank of Nigeria, no collateral loan for your business.
To secure a CBN loan, all you need to do is reach out to your preferred Participating Financial Institutions (PFIs), which are basically banks, microfinance folks, and other finance institutions given the CBN’s stamp of approval to hand out these funds.
The specific requirements may vary depending on the chosen PFI. However, you can generally expect to be asked for:
Having the required documents is just a part of the process. To apply for the loan:
By offering low interest rates and flexible repayment terms, CBN loans are a great loan choice for all types of businesses in Nigeria.
Applying for a CBN loan is not hard; all you have to do is make sure you apply for the right loan, contact a Participating Financial Institution (PFI) and provide the necessary documents.
So, don’t hesitate to explore the opportunities that CBN loans can bring to your business. Your dreams are just a loan away.