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Apply for CBN MSME Development Fund N220 Billion Loan for Business

This article will explain to you all the detail you need to know about the CBN MSME Development Fund. Read along...

by Eniola Samuel
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CBN MSME Development Fund and MSMEDF

This article is to guide people who are interested in applying for the CBN MSME Development Fund for startups and large businesses alike.

Let’s start with an overview of what MSMEDF is all about.

Brief Introduction of the CBN MSME Development Fund

The MSME Development Fund was launched by the CBN on August 15, 2013, with a share capital of N220 billion. The Fund became established in recognition of the substantial contributions of the Micro, Small, and Medium Enterprises (MSME) sub-sector to the economic system and the present massive financing gap.

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Ten (10) percent of the Fund has been dedicated to developmental targets such as grants, capacity building, and administrative costs whilst the remaining ninety (90) percent commercial component will be disbursed to Participating Financial Institutions(PFIs) at 2% for on-lending to MSMEs at a maximum interest price of 9% per annum.

You can check this to see how to apply for the CBN MSMEDF Loan with a simple guide.

Eligible activities to be financed include agricultural value chain, services, cottage industries, artisans, trade and commerce, and any income-generating enterprise as may be prescribed by the CBN from time to time.

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Main Objectives of the MSMEDF

The main objective of the MSME Development Fund is to release low-interest funds to the MSME sub-sector of the Nigerian economy through PFIs to:

  • Enhance access by MSMEs to financial services;
  • Increase productivity and output of micro-enterprises;
  • Increase in employment rate and creation of wealth
  • Engender inclusive growth

Benefits of the MSMEDF to Some Stakeholders

The list below is the benefits of some stakeholders that apply for the MSME Development Fund.

a) PFIs

The Developmental Components will be used for capacity building of staff of PFIs, research, and provision of other financial services infrastructure

b) MSMEs

Long term single-digit loans at 9% p.a. This will bring about reduced cost of borrowing which will positively impact the earnings of the MSMEs

c) Microfinance Sub-sector

The Fund will provide opportunities such as liquidity for the sub-sector and result in general improvement of the financial system stability

General Public

Increase in self-employment rate

Job creation

Eligible Activities under the MSMEDF

In accordance with the arrangements of the Revised Microfinance Policy, Regulatory and Supervisory Framework for Nigeria, enterprises to be subsidized under the Scheme include:

  1. Micro Enterprises
  2. Small and Medium Enterprises (SMEs)

The following are eligible activities under the Fund:
Micro-enterprises

  • ArtisansAgricultural value chain activities
  • Cottage Industries
  • Other economic activity as may be prescribed by the CBN
  • Services
  • Trade and general commerce
  • Renewable energy/energy-efficient products and technologies

Note: Only 10% of the Commercial component of the Fund shall be channeled to trade and commerce.

Conclusion

We are sure you have learned how this CBN MSME Development Fund can benefit you and your business. Applying for the fund is the next step to take as time for application matters.

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