The Nigerian government is set to introduce a ₦198 billion ($1.2 million) syndicated loan fund to support Micro, Small, and Medium Enterprises (MSMEs) in the country. The aim is to enhance access to affordable credit for MSMEs that often struggle to secure venture funding.
Scheduled to commence in Q1 2025, the initiative will provide loans of up to ₦400,000 ($289) with a 9% interest rate, a five-year term, and a one-year grace period, empowering businesses to expand and innovate sustainably.
This development comes as a boon for MSMEs that face challenges in obtaining funding and resources for business growth, unlike tech startups.
While tech startups often attract venture capital for their high-growth potential and global applicability, MSMEs, which are typically more localized and less tech-oriented, have traditionally struggled to access such funding.
The introduction of this loan fund for MSMEs by the government could pave the way for the informal sector to play a significant role in driving economic growth and bridging the funding gap in this often underserved segment.