CBN N500,000 Loan Portal Is Open – Apply Now

April 28, 2023

It is no longer news that the CBN N500,000 loan portal is open. The central bank of Nigeria is offering loans to individuals and small and medium firms. Want to unlock the secrets of getting such loans, read this article to the end.

In this write-up, we shall give all the details concerning this loan and the various steps you should take to get this loan.

CBN Loans – An Access to Fund that Can Benefit Your Business

Access to funds is one of the most important steps required to start a business. The central bank has made it very possible for small businesses to access funds with their Business Loans.

The amount of funds used to start a business goes a long way in determining the success or failure of a business. This is the reason why the Central Bank of Nigeria is putting down a substantial amount.

Details of the Central Bank of Nigeria Fund

On July 2020, the central bank of Nigeria set up directives to steer low-earning funds to micro, small and medium businesses or enterprises through participating financial institutions to access their access to financial services.

Brief Introduction to the MSMEDF

The Central Bank of Nigeria launched the MSME Development Fund on the 15th of August 2013 with a share of N220 billion. They established this fund in recognition of the significant contributions of the Micro, small, and medium enterprises subset in the economy and the existing financial gap in society.

They dedicated 10% of the fund to developmental objectives such as grants, capacity building, and administrative costs while the remaining 90 percent was released to the participating financial institutions and then 2% for lending to the MSMEs at a maximum interest rate of 9% per annum.

The Aim of the Central Bank Loans

They aim these loans at supporting the creation of new businesses, promoting the growth of businesses, revitalizing struggling companies, and aligning with the provisions of the banks and other financial institutions’ acts.

The objectives of these loans are to increase the efficiency and output of MSMEs, generate employment opportunities, and drive inclusive growth.

How to Apply for the Micro and Small and Medium Enterprise Development Fund

To access the Micro and Small and Medium Enterprise Development Fund, as it is popularly called, borrowers must approach participating bodies or financial institutions of their choice.

The Serving Micro entrepreneurs and SMEs

The participating financial institutions serve two different groups.

The first groups are for people seeking loans of less than N500,000. If you fall into this category, you can approach any of the following institutions;

Microfinance banks
NGOs/ microfinance institutions
Financial corporations
Finance companies.

On the other hand, SMEs seeking loans between N500,000 and N50 million can approach the following places;

Deposit money banks
Bank of Industry
Bank of Agriculture.

Businesses Eligible for the SME Loan

If your business falls under the following categories, then you are eligible for the Central Bank Loan.

Agricultural value chain activities
Manufacturing and cottage industries,
artisans
Services, trades
General commerce
Renewable energy or energy-efficient products and technologies.
Any other income-generating projects prescribed by the central government.

More Details for Interested Borrowers

If you are interested, you must provide the necessary documentation including the collateral for SME loans.

The participating financial institutions will then evaluate your loan application, approve it if you are eligible, and then forward your loan requests to the CBN for the release of funds.

The CBN will only release funds to the borrowers through the participating financial institutions. This means that you do not need to approach the bank by yourself. The MSMMEDF will then credit within the next 5 working days of the release of funds from the account of the borrower to the PFI.

These loans will be granted at a 9% interest per annum to the businesses regardless of the financed activity. You must pay back all loans including the accrued interests to the PFI as and when due. The Participating financial institution then recycles the money back to the CBN.

Benefits of the MSMEDF to Some Stake Holders

PFIs

The developmental component of the fund will be utilized for the capacity building of staff of the PFIs, research, and provision of other financial services infrastructure.

MSMEs

They give long-term single-digit loans at 9% per annum. This particular subset has resulted in a reduction in the cost of borrowing, which will impact positively the earnings of the MSMEs.

Microfinance Sub Sector

this fund will provide liquidity for the sub-sector and result in the general improvement of the stability of the financial system.

The General Public

The creation has led to an increase creation of jobs for the general public.

Frequently Asked Questions

What is the Period for Repayment of the Loan?

For small businesses, the maximum period is 1 year. While for small and medium enterprises, the maximum period will be three years.

How Much Can I Get

From the MSMEDF, you can get up to

N500,000 if you have a micro-business and
N50 million if you have a small and medium enterprise.

How Do I Qualify for A CBN Loan?

To qualify for this loan, you must have a registered business or company with the corporate affairs commission. Since the CBN does not lend money directly, you will need to be a customer of one of the eligible financial institutions.

What Types of Businesses Qualify for the Central Bank MSMEDF Loan?

You can access this loan if you work in the following industries;

Agricultural value chain activities
Manufacturing and cottage industries,
Artisans
Renewable energy or energy-efficient products and technologies.

Any other income-generating projects prescribed by the central government.

Services, trades
General commerce

Is the Central Bank of Nigeria Giving Out Loans?

Of course, they are. The central bank of Nigeria gives out loans each year at an unprecedented level. The central bank of Nigeria has given out a total of N5.6 trillion between January and October 2022 alone.

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