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How to Access CBN MSMEDF Loan – Requirements & How to Apply

By James KaseJuly 22, 202012 Comments Business
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How to Access CBN MSMEDF Loan – Eligibility, Requirements & How to Apply: In this article, you will get vital information as regards to the Basic Guidelines on How to Access CBN MSMEDF Loan – Micro, Small and Medium Enterprises Development Fund.

After identifying the huge financing gap which hinders the development of MSMEs, the Central Bank of Nigeria (CBN) as part of its developmental role and mandate of promoting a sound financial system launched the Micro, Small and Medium Enterprises Development Fund – CBN MSMEDF Loan.

READ ALSO: United Nations Recruitment 2020 for Programme Officers

Contents

  • 1 CBN MSMEDF Loan – Eligibility, Requirements & How to Apply.
  • 2 CBN MSMEDF Loan Eligibility.
  • 3 Commercial Component
  • 4 Developmental Component
  • 5 CBN MSMEDF Loan for Start-ups
  • 6 How to Access CBN MSMEDF Loan.
  • 7 CBN MSMEDF Loan Financing Tenor
  • 8 CBN MSMEDF Loan Financing Repayment

CBN MSMEDF Loan – Eligibility, Requirements & How to Apply.

The objective of the Fund according to CBN is to channel low return funds to the MSME sub-sector of the Nigerian economy through Participating Financial Institutions (PFIs) enhance access by MSMEs to financial services;

  • Increase productivity and output of micro-enterprises;
  • Create jobs; and
  • Engender inclusive growth.

CBN MSMEDF Loan Eligibility.

Eligible Enterprises In line with the provisions of the Revised Microfinance Policy, Regulatory and Supervisory Framework for Nigeria, enterprises to be funded under the Scheme shall be:

a) Micro Enterprises

b) Small and Medium Enterprises (SMEs)

The following are eligible activities under the Fund: Microenterprises
● Agricultural value chain
● Cottage Industries
● Artisans
● Services
● Renewable energy/energy efficient product and technologies
● Trade and general commerce
● Other economic activities as may be prescribed by the CBN

The Fund is split into two components, Commercial and Developmental components.

Commercial Component

The Commercial Component shall constitute 90 per cent of the Fund which shall be disbursed in the form of Wholesale Funding to PFIs in the following ratio:

  1. 60% of the Fund: Women
  2. 40% of the Fund:

Others Objectives of Wholesale Funding are to:

a) Provide facilities to eligible PFIs for on-financing to MSMEs;

b) Improve the capacity of the PFIs to meet credit needs of MSMEs; and


c) Reduce the rate of financing to the PFIs and the beneficiaries

Developmental Component

The Developmental Component makes up the remaining 10 per cent of the Fund. It shall be earmarked for developmental programmes in form of Grants.
The 10% Grant shall be utilized for the general development of the MSME sub-sector in the following areas:

  • a) Capacity building
  • b) Development of appropriate regulatory regime for MSMEs financing
  • c) Financial literacy and entrepreneurship development
  • d) Mobilization, training and linkage of MSMEs to financial services
  • e) Research and Development of MSMEs-friendly financial innovations and products
  • f) Business Development and Advisory Services
  • g) Building of financial infrastructure to support the growth of MSMEs It shall also serve as incentive targeted at PFIs that demonstrate good performance under the Fund.

Note:

  • Only 10% of the Commercial component of the Fund shall be channeled to trade and general commerce.
  • Nigerian Agricultural Insurance Corporation (NAIC) Insurance is compulsory for primary agricultural production

CBN MSMEDF Loan for Start-ups

PFIs are required to fund start-up projects under the MSMEDF. To encourage NIFIs, some incentives shall apply (see Section 3.0). PFIs are expected to accept charge on fixed and floating assets of the financed projects as collateral for start-ups. Collateral requirement from start-ups by PFIs (NIFIs) shall be educational certificates

i. SSCE

ii. National Diploma (ND)

iii. National Certificate of Education (NCE)

iv. National Business and Technical Examination Board (NABTEB)

v. Higher National Diploma (HND)

vi. University degree (NYSC Certificate where applicable) and a guarantor.

The start-ups to access the MSMEDF must present their Bank Verification Number (BVN).

How to Access CBN MSMEDF Loan.

  1. The beneficiaries shall apply to the nominated PFIs for financing.
  2. The PFIs shall appraise the applications for economic and financial viability.
  3. The PFIs shall forward their applications through the State SPV to the CBN in the prescribed format.
  4. CBN shall undertake a pre-disbursement assessment of financing requests presented to it by the SPVs on behalf of the nominated PFIs.
  5. CBN shall approve and disburse funds directly to the PFIs’ correspondent bank accounts. -inclusive rate of return of 9% per annum.

CBN MSMEDF Loan Financing Tenor

The facility shall have a maximum tenor of one (1) year for micro enterprises. Financing tenor for SMEs shall be from one (1) to five (5) years with the option of moratorium as may be deemed necessary. PFIs shall re-access the fund upon full repayment of the outstanding.

CBN MSMEDF Loan Financing Repayment

Principal and Profit repayment for micro and SME financing shall be annually.

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12 Comments

  1. Odejide Muideen Adewale on October 29, 2020 11:12 am

    Good morning sir, I will like to obtain the loan to boost my business and recover from covid19 pandemic crisis. Thanks

    Reply
    • James Kase on October 29, 2020 11:15 am

      Follow the guidelines on how to apply for this loan as indicated in the advert above. Kind regards.

      Reply
  2. Vote john ejimiwokwo on October 25, 2020 2:33 pm

    Thanks for the update on how to apply for the loan, all that you wrote are not for everyone to understand, please I want to apply for the loan how can Iget the money , my farm overgrown with grasses and I still have up to two hectares of land for cassava

    Reply
  3. Abdullahi umar on July 29, 2020 2:35 pm

    I have faultry farm i still need support

    Reply
  4. St IROKO on July 28, 2020 12:46 am

    Please tell us the website to visit for the application, no accessible address, all na story

    Reply
  5. Musa muhammed on July 24, 2020 7:54 pm

    I need a loan for business

    Reply
  6. Suliat Mustafa on July 24, 2020 3:04 pm

    Very good for entrepreneurs. I mend the federal government.

    Reply
  7. Sulaiman muhammad usman on July 24, 2020 2:42 pm

    Iam very interested

    Reply
  8. Ibrahim Ahmad Mohammed on July 24, 2020 8:23 am

    I’m very very interested

    Reply
  9. Elijah G Abu on July 23, 2020 7:19 pm

    Interested

    Reply
  10. Muhammad awal usman on July 23, 2020 12:34 pm

    Let the process continued please.

    Reply
  11. Idris Abdulazeez on July 23, 2020 10:04 am

    I always thanks our leader’s belief by thinking deeply baseon ng youth,bz they may become a Major problems to Nigerian,so,helping the youth with financial support is very good ideal,my own business is faming and I needed like three hundreds thousands#300,000.

    Reply

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