What is an SME loan?
An SME (Small and Medium Enterprises) loan is elementary funding of small and medium-sized business enterprises. The SME loan assures a thin gap of credit for attaining the borrowing needs of small and medium scale enterprises. It can be used as working capital as well as for long term requirements.
Purpose of SME loans.
As a matter of fact, an SME loan serves as working capital for a long time, he loan ensures that the borrowing needs of SME’s are met right away, and again, it is confirmed after checking the business nature, cash flow, the trend, and climax requirements.
#1. Eligibility:
To be eligible for this loan, one should meet up with the specified profits under the MSMED Act of 2006 for SME and also the microwave enterprise.
#2. Security:
Securities (collaterals) are needed to access some SME loans while requiring no collateral. Some demand collateral depending on the amount you request but mostly when you come from a registered organization no collateral is needed.
Features of SME loans.
#1. It is easy to access.
#2. Interest rates are attractive and also affordable, depending on your business strength.
#3. The documentation is not rigid.
#4. However, this entails easy repayment.
#5. Creditors can offer you up to 2 years before you pay back.
Some SME loans in Nigeria.
In Nigeria, SME loans are also accessible and once you meet up the requirements, you will get them. In reality, some banks offering SME loans in Nigeria includes the UBA, GT BANK, the Central Bank of Nigeria, and other governmental banks like Bank of Agriculture, Bank of Industry, and the Development Bank of Nigeria.
SME Loans without Collateral in Nigeria.
In Nigeria, some platforms/banks issue loans without collateral and they include;
#1. United Bank of Africa (UBA):
Firstly, UBA has a program “NO WAHALA LOAN” and this is without collateral and might borrow loans for SME or to fix your car, pay bills, and for other emergencies.
#2. GT Bank:
Secondly, the GT Bank “quick credit” is super-fast and can be gotten in just two hours of official sanctions and this loan does not require paperwork. You get it by dialing a shortcode and it’s a maximum of 5 million nairas.
#3. First Bank of Nigeria (FBN):
Thirdly, the FBN operates the “first edu” loan and this is available for private educational sectors that are registered with the Corporate Affairs Commission (CAC). The loan obtainable is up to 10 million nairas.
4) First City Monument Bank Limited (FCMB):
FCMB provides the following loans without collateral:
#1. Auto Loan: This loan enables customers to own a car and pay over time.
#2. Salary Top-up: This loan grants you access and grants you payment before payment.
#3. Fast Cash loan: This grants instant cash to customers, up to 100,000.
#4. Premium Salary loan: This grant is up to a minimum of 2 million nairas.
To access these loans, just dial *329# USSD code.
On the other hand, banks like WEMA Bank, Access Bank, Stanbic Bank, and Fidelity Bank have loan programs without collateral. But for online purposes, you can search for the following platforms to get a quick loan without collateral in Nigeria.
They are as follows: GROFIN, SMEDAN, LYDIA.CO, AELLA-CREDIT, ZEDVANCE, PAYLATER, KIAKIA.CO, ONE-FI, SPECTA, and QUICK CHECK.
Federal Government SME loans.
Basically, the Federal Government has released new details on the Micro Small and Medium Enterprises (MSMEs) support scheme being rolled out under the National Economic Sustainability Programme.
Accordingly, estimate provides sum of N50 billion will be used to provide payroll support, N200 billion for loans to artisans, and N10 billion support to private transport companies and workers
Correspondingly, the government disclosed in a tweet on the official handle of the government, the support scheme will include a Guaranteed Off-take Scheme for priority products, and an MSMEs Survival Fund.
The Bank of Industry is there to provide transformation of Nigerian industrial/manufacturing sector.
As a result, there are several intervention funds under the Bank of Industry. Examples include:
#1. N235 BILLION CBN INTERVENTION FUND FOR MANUFACTURING RE-FINANCING AND RESTRUCTURING FACILITIES OF BANKS’ LOANS.
#2. N300 BILLION CBN POWER AND AIRLINE INTERVENTION FUND (PAIF)
#3. FGN SPECIAL INTERVENTION FUND FOR MSMEs (National Enterprise Development Program)
Read More: Federal Government Grants
Development Bank of Nigeria Loans (DBN).
This is another of the Government SME Intervention funds that so many SME owners in Nigeria don’t know about. However, the DBN exists for one purpose, o alleviate the financing constraints that micro, small, and medium scale enterprises face in Nigeria.
To qualify for a DBN loan, you must meet these criteria:
#1. Be involved in productive enterprises.
#2. Must be a customer of a certified financial institution.
Agric Small Medium Enterprise Investment Scheme (AGSMEIS).
The AGSMEIS initiative is specifically one of the many Federal Government Intervention efforts to promote agri-businesses in the country. It also provides support to other SMEs to facilitate employment generation and sustainable economic development.
Furthermore, MSMEs can apply for up to N10 million at a return rate of 5% per annum. Some of the objectives of this scheme include:
#1. Provide finance to Nigerian SMEs.
#2. Generate employment opportunities for Nigerian youth.
#3. Equally, facilitate sustainable agricultural practices and develop an efficient agricultural value chain.
#4. Boost managerial capacity in SMEs and Agri-businesses so that they can grow to become huge organizations.
Some sectors of the AGSMEIS caters to the following:
- Agriculture
- Health
- ICT
- Creative Industry
- Production and Manufacturing
- Services (restaurants, hospitality)
World Bank SME loan:
Comparatively, World Bank data, financing, and know-how have helped millions of SMEs to gain access to financial services to manage risks, survive temporary cash-flow constraints, and grow; thus creating jobs and raising incomes. The World Bank helps more than 60 countries provide an enabling environment for MSMEs, with an active portfolio of US$3.2 billion for MSME support through 38 active lending projects, with many more MSMEs benefiting through WB-supported financial institutions.
How to apply for SME Loan.
#1. Submit Application:
Simply enter your personal, business and also financial information to receive an MSME/ SME loan.
#2. Upload Your Documents:
If you applied online then upload your digital data for verification but if offline submit your documents to the nearest branch.
#3. Get Approved:
Before accessing this loans just make sure you get approved legitimately to avoid any complications.
FAQ
What is SME loans in India?
SME loans are business loans extended only to small & medium-sized enterprises. These loans are tailor-made to suit the needs and requirements of SMEs. SME loans may be used to finance working capital and/or capital expenditure requirements of businesses involved in the trading, manufacturing, and service sectors.
What is SME in SBI bank?
The nation’s largest lender State Bank of India (SBI), which is flush with liquidity as large corporates are holding back investments, is focusing on increasing its Small and Medium Enterprises (SMEs)loan book by opening dedicated branches across the country.
Can I get loan for new business?
You can avail a Startup business loan from a bank or a financial body in order to raise funds to start a business of your own or expand your current business. The rate of interest charged by the bank will depend on the loan amount availed by you and the repayment tenure.
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