Charles Nwaoguji

It’s true that most Nigerian Small and Medium Enterprises (SMEs) are having a hard time starting and growing up their businesses due to the inaccessibility of business funds.

The major reason that often kills great business ideas and, perhaps, the dreams of Nigerian entrepreneurs is their inability to meet the requirements of obtaining a bank loan.

Usually, an Entrepreneur could raise business funds through:
Personal savings, contributions from friends & families, government grants, venture capital , angel investors, crowdfunding sites and banks loans.

Kalu Foundation and banks – whether commercial, industry or development banks naturally offer the least interests funding for SMEs.

Banks generally charge between 5-9 per cent interest rate (and more), for 1-5 years short-to-long term business loans.

In Nigeria, you can obtain bank loans as small as N50, 000 and as big as N100 million depending on the scope of your business.

If you are thinking of raising business capital through the banks, you should note that bank loans are usually secured; hence, you’ll need to provide collateral before you can be considered for a loan approval.

However, some Nigerian banks have awakened to the reality that most start-up entrepreneurs in Nigerian have only solid business ideas behind their heads, and no collateral to show for their loans.

Therefore, they are now willing to offer startups, business owner and entrepreneurs certain amount of money in the form of business loans without collateral.

This effort is as part of these banks’ initiatives to empower growth in the SME sub-sector by giving out small to long time loans to businesses that need them. The great thing about these SME business loans is that they are designed to be easily accessible to entrepreneurs irrespective of the type or size of their businesses.

So take the time to find the one that suits your financing needs, below is a list of five Nigerian banks that will give you business oan without collateral.
Kalu Foundation

This foundation gives loans to SMEs without collateral with single digit. It is one foundation that has SMEs in heart. They are ready to assist small enterprises to grow. A lot of people has benefited from this organization.
First Bank of Nigeria Plc

The First Bank of Nigeria has made plans to provide non-collateral loans for SMEs in Nigeria. This initiative is aimed at empowering economic growth in the Nigeria SME sector through their loan schemes.

The great thing about First Bank’s unsecured loans is that it is easily accessible to entrepreneurs irrespective of the business type, location or size.
As an interested entrepreneur, the only thing you need to do is to go through a psychometric test, pass the test and then provide the bank with your business plan and your business financial projections.

Heritage Bank

Heritage Bank has also increased the accessibility to SMEs business funds in Nigeria. The bank has also built initiatives around promoting access to the market for SMEs. One of their major programs is the Youth Innovative Entrepreneurship Programme (YIEDP) backed by the Central Bank of Nigeria (CBN) – in recognition of its commitment to SMEs and youth development.

The programme is aimed at harnessing the latent entrepreneurial spirit among the teeming youths by providing timely and affordable loans to help implement their business ideas.

The fund is to support youth corps members, market women and whoever desires to access business finances through short –term borrowing from the bank.

Diamond Bank Plc

Diamond Bank Plc also offers entrepreneurs an opportunity to obtain loans without collateral.

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The bank’s non-collateral loans are designed to stimulate growth for Micro, Small and Medium Enterprises (MSME) in Nigeria.

Diamond Bank Plc has about five SME friendly accounts that you can open and start with.

If you want a loan without collaterals, you’ll have to look at the bank’s SME loan packages and choose the one that is best to your kind of business.
Diamond Bank’s SME loans can be accessed in the form of: Revolving Credit, Installment Loan, Local Purchase Order (LPO) Finance and Contract Finance.

Thus, Diamond Bank gives you access to short and medium term financing for working capital as well as assets purchase needs with reduced collateral requirements.

Wema Bank

Before you approach any of these banks for a non-collateral loan, it would be in your best interests to first open, run and maintain an account (corporate preferred) with such a bank for a period of three to six months.
You should also be armed with a sound Business Plan and a solid Repayment Plan for the loan.

Unlike other Nigerian banks, WEMA has more dealings with retail businesses.

The bank has built its structure around retail banking, conducting transactions with market women and real SMEs. It is worthy to note that Wema Bank gives business loans from N100,000 to N1 million without any collateral.

All you need to do is to have steady transactions for six months in your corporate account to qualify for their loan offers. To show their eagerness to give out these loans, the bank even has a loan calculator on its website – which helps interested loan applicants to calculate how much the bank would be expecting from your loan request.

Stanbic IBTC Bank

The Stanbic IBTC Bank offers Nigerian entrepreneurs a great opportunity to obtain business loans without providing collateral.
The loans are designed to help SMEs buy their business assets.
However, the assets only become your own when you make the last payment on the received loan.

To apply for Stanbic IBTC non-collateral loan, you should be prepared to provide the bank with the following information:

Stanbic IBTC loan application requirements

• The full names and capacities of those who will sign;

• CV of each member of the management team;

• The reason why you need the business finance;

• Your business’ financial statements, including an income statement, balance sheet and cash flow statements;

• Personal statements of assets and liabilities of all the partners, members or directors;

• A 12-month cash flow forecast or financial projections;

• The amount of your own contribution and the source of the funds.