Apply Now: The Presidential 200 Billion Naira Fund For Businesses

This blog post explores the Presidential 200 Billion Naira Fund the eligibility criteria, loan details, and the transformative potential of this initiative in driving economic progress and prosperity for all Nigerians.

Introduction

In a bid to attaining economic growth and industrial development, the Federal Government of Nigeria has launched the MSME and Manufacturing segment of the Presidential 200 Billion Naira Fund. This initiative aims to provide financial support to micro, small, and medium-sized enterprises (MSMEs) as well as the manufacturing sector. With the applications for the Presidential Conditional Grant Scheme closed, the focus now shifts to the disbursement of loans to eligible businesses.

Summary of the Announcement

The announcement, made by Hon (Dr) Doris Nkiruka Uzoka-Anite outlines the key components of the initiative and stresses its significance in bolstering Nigeria’s economy. Here’s a breakdown of the important points:

a. Fund Allocation

• The Presidential 200 Billion Naira Fund is divided into two main segments:
  • 75 Billion Naira earmarked for MSMEs
  • 75 Billion Naira allocated for the Manufacturing sector
• This allocation reflects the government’s commitment to supporting both small businesses and the industrial sector, recognizing their vital roles in economic development.

b. Initial Disbursements and Success Stories

• The announcement highlights the success of the initial disbursements, particularly to nano businesses.
• Over 1 million nano businesses across Nigeria have already benefitted from the fund, with more beneficiaries set to receive grants in the coming weeks.
• These success stories serve as a testament to the impact of the initiative in empowering grassroots entrepreneurs and creating inclusive economic growth.

c. Loan Details

• MSMEs are eligible for loans of up to 1 million Naira, providing them with much-needed capital to expand their operations and scale their businesses.
• Manufacturers, on the other hand, can access loans of up to 1 billion Naira, enabling them to invest in technology, infrastructure, and innovation to enhance productivity and competitiveness.

Loan Eligibility Criteria

1. Loan up to 1M

a. Eligibility Criteria

• Existing businesses must have been in operation for at least one (1) year, demonstrating stability and a track record of operations.
• Start-ups must be registered as a business entity, providing proof of registration from the Corporate Affairs Commission (CAC).
• Submission of CAC business registration documents is mandatory for all applicants.
• Submission of the company’s bank statement(s) for a period of one (1) year is required for existing businesses, while start-ups must provide bank statement(s) of the Chief Promoter (Director or Business owner) for the same duration.
• Applicants must demonstrate the required monthly turnover and comply with any other documentation requests made by the bank.

b. Security

• Personal guarantee of the promoter is necessary to secure the loan.
• Acceptance of BVN Covenant (Global Standing Instruction- GSI) and any other requirements specified by the bank are mandatory.

c. Repayment Frequency

Monthly equal installments, without a moratorium, over a period of 3 years, ensuring a structured repayment schedule for borrowers.

2. Manufacturers up to N1 billion (Working Capital or Asset Financing)

a. Eligibility Criteria

• A minimum of 6 months of business/corporate banking relationship with the lending institution is required, indicating a stable financial history.
• Submission of CAC business registration documents is mandatory, demonstrating the legal status of the manufacturing entity.
• Applicants must provide 12 months of bank statements from other banks, offering insights into their financial performance and liquidity.
• Additional documentation may be requested by the bank to assess the viability of the manufacturing project

b. Security

Security requirements will vary based on the assessment of the manufacturing project and may include collateral or other forms of security as deemed necessary by the bank.

c. Repayment Term

i. Asset Financing

A 6-month moratorium period on both principal and interest, followed by a 5-year repayment period, ensuring flexibility in repayment for asset financing projects.

ii. Working Capital Financing

Repayment involves 12 months of equal installments of principal and interest, providing manufacturers with predictable cash flow management and financial stability.

Documents Required for Application of MSMEs (Loan up to 1M)

1. Existing Businesses

• Proof of business operation for at least one (1) year
• Corporate Affairs Commission (CAC) business registration documents
• Company’s bank statement(s) for a period of one (1) year

2. Start-ups

• Proof of business registration with CAC
• Chief Promoter’s (Director or Business owner) bank statement(s) for one (1) year
• CAC business registration documents

3. Both Existing Businesses and Start-ups

• Personal guarantee of the promoter
• Acceptance of BVN Covenant (Global Standing Instruction- GSI) and any other requirements specified by the bank

Documents Required for Application of Manufacturers Loan (Up to N1 Billion)

Minimum 6 Months Business/Corporate Banking Relationship:

• Proof of business relationship with the lending institution
• Corporate Affairs Commission (CAC) business registration documents
• Bank statements for the manufacturing entity for 12 months
• Additional documentation as may be required by the bank

Method of Application

Interested applicants should begin their application online by visiting the official website for the loan application https://loan.fedgrantandloan.gov.ng/https://loan.fedgrantandloan.gov.ng/

Conclusion

The launch of the Presidential 200 Billion Naira Fund marks a significant milestone in Nigeria’s journey towards economic empowerment and industrial growth. By providing financial support to MSMEs and the manufacturing sector, this initiative not only stimulates entrepreneurship but also fosters job creation and drives national progress.