By Charles Nwaoguji
FUNDING remains most challenging factor on most startups and entrepreneurs hardly have enough to finance their businesses. But to alleviate the financing constraints faced by Micro, Small and Medium Enterprises (MSMEs) in Nigeria, government has introduced various loans schemes to assist different categories of entrepreneurs in the country.
It was in deed partly due to this critical challenge that government established the Bank of Industry (BoI) formerly known as Nigeria Industrial Development Bank (NIDB) Limited, to provide credit and loans to support them establish, expand, mechanise and diversify small scale, medium scale and large scale industries in Nigeria. According to the acting Managing Director of BoI, Mr. Waheed Olagunju, government decided to establish BoI due to its belief that SMEs to the engine room of the economy.
“We recognise that businesses need the right kind of funding support to succeed. The good news is, we have credit available and we want to lend. So whether you have an idea for a new business start-up or you are an existing business owner, we want to talk to you,” he said.
Already various loan schemes have created by the government to assist businesses in the country including Agricultural loan: This is a loan made for those who want to venture into agro processing, such as fruit juice.
Graduate Entrepreneurship Fund (GEF): The GEF is a special N2 billion empowerment programme for serving members of the National Youth Service Corps (NYSC) launched on October 5, 2015.
This novel scheme, which is a joint initiative of BoI and the NYSC, is aimed at encouraging graduates of tertiary institutions undergoing the compulsory one-year NYSC programme to venture into business and become employers of labour rather than job seekers; addressing the entrepreneurship capacity gap among the NYSC members who are expected to produce bankable business plans after the three-day capacity building programme and also to deepen financial inclusion by de-risking the corps members and making them eligible for concessional loans ranging between N500,000 and N2 million.
Youth Entrepreneurship Scheme (YES): As part of its efforts at job and wealth creation, BoI decided to create the YES-Programme, with the aim of tackling the malaise of unemployment among the youths. The programme, which was launched on March 12, 2016 is targeted at the young aspiring entrepreneurs in the age range of 18- 35 years, with minimum educational qualification of Ordinary National Diploma (OND) or equivalent.
Intervention fund for manufacturers: This is a special fund created by the government to assist the manufacturing sector (SMEs) to access loans without tears.
Entertainment Industry loan: This loan is meant for Nollywood actors, actresses and especially those producing films. It comes with single digit interest rate.
Requirement for accessing the facilities. For one to access any of these loans, there are some criteria that must be met. These include:
(1) Collateral worth minimum 150 per cent
(2) Feasibility study/business plan
(3) A registered business name or cooperative
(4) Form from BoI office
(5) Completion of the questionnaire
(6) Submission of application forms.