Small Businesses Owned By Women To Get Loan From CBN's N220 billion SME Fund

Small businesses run by women will get funds from the Central Bank of Nigeria (CBN) through banks and other financial institutions as the CBN moves to close the financial gap and ensure gender-equal financing. According to the CBN, women's access to finance will now be increased through the Micro, Small, and Medium Enterprises Development Fund.

The Micro, Small and Medium Enterprises Development Fund has N220 billion capital base for small businesses run by both men and women, but 60 percent of the fund will be made available to women-run small businesses across Nigeria. The fund is coming at a time small businesses are struggling financially due to the impact of COVID-19 on business activities within the country.

For about two months, businesses were shutdown in Nigeria to curb the spread of coronavirus. The lockdown measure adopted by the government affected the large corporation and also had a significant impact on small businesses, with their revenue being blocked due to the restriction of movements. This has placed a financial burden on many small businesses, as they can't afford to reopen at full strength.

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In order to assist small businesses' reopening, the CBN will enable them have access to the N220 billion Micro, Small and Medium Enterprises Development Fund, which will be disbursed through commercial banks and other financial institutions. While speaking about the fund in a circular, CBN stated, “The sub-sector is characterised by huge financing gap which hinders the development of MSMEs.

“Section 6.10 of the Revised Microfinance Policy, Regulatory and Supervisory Framework for Nigeria, stipulates that ‘a Microfinance Development Fund shall be set up, primarily to provide for the wholesale funding requirements of MFBs/MFIs’.

“To fulfil the provisions of section 4.2 (iv) of the policy, which stipulates that women’s access to financial services to increase by at least 15 per cent annually to eliminate gender disparity, 60 per cent of the Fund has been earmarked for providing financial services to women.”

What You Need To Know About The Fund

The funds will be split, with both micro-enterprises and small and medium enterprises taking up halve each. The fund will be disbursed in the form of wholesale funding to banks and other participating financial institutions involved in the Micro, Small and Medium Enterprises Development Fund.

The fund will increase the capacity of banks to offer loan to micro, small and medium businesses amidst a period non-performing loan is on the increase. This will also expand access to funds for SMEs, ensuring inclusiveness among SMEs and the financial industry, which will enable banks to meet the needs of micro, small and medium businesses.

[READ ALSO: What You Need To Know And Do To Get CBN's Non-interest N432bn Loan]

CBN stated that 90 percent of the fund will be for commercial component, while 10 percent of the fund will be for developmental component, AllNews gathered. The development process will include capacity building, development of appropriate regulatory regime for MSMEs financing, financial literacy, and entrepreneurship development.

It was also learnt that part of the development fund will be earmarked for mobilisation, training and linkage of Micro, Small, Medium enterprises to financial services, research and development of MSMEs-friendly financial innovations and products, business development and advisory services and building of financial infrastructure to support the growth of MSMEs.

How Female Entrepreneurs Can Get Low-Interest Bank Loans In Nigeria

Are you a female entrepreneur in need of financial support to save your small and medium business from the onslaught of Coronavirus? if so, there are several unknown bank loan packages or opportunities at low-interest rates that have been designed specifically for female entrepreneurs that could help you mitigate the coming recession.

As an entrepreneur, you need loan packages or credit sources that are not looking to profit from you but grow your enterprise in a business environment that is typically hostile to small and medium businesses. That's why AllNews collated some women-oriented loan packages of banks that might be alien to many female entrepreneurs.