The Federal Government has disclosed plans to begin disbursing loans at a single-digit interest rate to Small and Medium Enterprises by the third quarter of 2025, addressing a long-standing challenge for small businesses in Nigeria.
This significant announcement was made by the Senior Special Assistant on Job Creation and MSMEs, Temitola Adekunle-Johnson, during a Nationwide Townhall and Sensitization Programme focused on the Presidential Grant and Loan Scheme for MSMEs in Abuja.
Adekunle-Johnson emphasized the government’s commitment to supporting the SME sector, stating, “The presidency is working in partnership with some of our commercial private sector partners like Access Bank, Wema Bank, and the Bank of Industry to ensure that from the third quarter of 2025, this administration across all states will start giving out single-digit loans.”
He highlighted the crucial role of SMEs in Nigeria’s economy, noting that they collectively employ over 80 percent of the nation’s labor force and contribute nearly half of the national GDP.
“Small businesses need an enabling environment and adequate financing to thrive,” he added, pointing out the existing barriers that hinder their growth.
Access to affordable loans has been a persistent issue for small and large-scale manufacturers alike, largely due to the Central Bank of Nigeria’s monetary policy rate hikes.
At its last Monetary Policy Committee meeting, the Central Bank raised the Monetary Policy Rate by 50 basis points to 27.25 percent, creating additional challenges for economic activities.
Furthermore, many SMEs struggle to meet the collateral requirements set by banks, which, combined with exorbitant interest rates, deters them from seeking formal financing.
To counter these issues, Adekunle-Johnson shared that the current administration has finalized plans to introduce loan disbursement at a single-digit interest rate starting next year.
“We will start giving out these single-digit interest loans in partnership with the state governments. Currently, 18 state governments have signed up for that partnership,” he noted, underscoring the program’s wide-reaching potential across Nigeria.
He also stressed the need for a supportive environment for small business owners, stating, “What you need is an environment that allows you to walk into the bank, collect money from your business, go around your business and pay back.”
He envisions a system where small business owners can confidently approach banks, present their financial records, and receive the funding they need to operate and grow.
In his address, Mohammed Idris, the Minister of Information and National Orientation, reiterated that enhancing small businesses is central to the economic reform agenda of the current administration.
He acknowledged the economic challenges resulting from recent policy changes but emphasized that targeted support programs are in place to help businesses navigate these difficulties.
“We are also keen to ensure that these targeted support programs go a long way towards alleviating the pains and challenges being experienced on account of the bold economic reforms being implemented,” he stated.
Idris outlined ongoing interventions, including N200 billion in loans and grants, with N50 billion designated for one-off conditional grants aimed at Nano-businesses, while subsequent phases will target Micro, Small, and Medium Enterprises and large-scale manufacturers.
He assured applicants that accessing these interventions requires only submission of their applications, eliminating the need for personal connections within the government.
To further engage with MSMEs and gather feedback on their experiences, similar town hall meetings are taking place simultaneously across the six geopolitical zones of the country.
This initiative aims to strengthen the support system for small businesses, ensuring they can benefit from the upcoming loan schemes and other interventions designed to foster economic resilience and growth.
