Nigeria Announces N150b Grant for Businesses: All You Need to Know

Nigeria has initiated a significant financial support scheme, allocating N150 billion in grants and loans to aid small business owners across the country. This grant, spearheaded by the Federal Government, is a proactive response to mitigate the economic impact following the removal of fuel subsidy, as announced by President Bola Ahmed Tinubu effective from June 1, 2023.

These initiatives represent the government’s commitment to economic development, entrepreneurship, and financial empowerment. By providing this support, the Federal Government aims to encourage entrepreneurship and create jobs, particularly in the wake of economic challenges posed by the removal of the fuel subsidy.  

The Minister for Industry, Trade, and Investment, Dr. Doris Uzoka-Anite, has outlined the objectives and mechanisms of these programs, emphasizing their role in fostering economic resilience among small businesses. Let’s dive in.

The grant involves presidential conditional grant and palliative loan

The scheme encompasses two key programs, the Presidential Conditional Grant and the Presidential Palliative Loan. In the Presidential Conditional Grant program, nano businesses situated in each of the 774 local government areas in Nigeria will receive a grant of N50,000.00. This initiative is part of a collaborative effort involving the Federal Ministry of Industry, Trade and Investment, SMEDAN (Small and Medium Enterprises Development Agency of Nigeria), state and local governments, federal legislators, ministers, banks, and other stakeholders.

For the Presidential Palliative Loan, the scheme targets Micro, Small, and Medium-sized Enterprises (MSMEs) and manufacturers, with a total disbursement of N75 billion for each category. The loans, carrying a single-digit interest rate of 9% per annum, offer MSMEs up to N1 million with a three-year repayment period, while manufacturers can access up to N1 billion, specifically for working capital and the purchase of machinery and equipment, with repayment periods of one and five years, respectively.

How to be eligible

To be eligible, businesses must provide proof of their location within their respective local government areas and furnish personal and bank account information, including Bank Verification Numbers (BVN). The application process is streamlined through a dedicated online portal, ensuring accessibility and transparency.

The loan can be repayable over three years

Loans come with a single-digit interest rate of 9% per annum. MSMEs can access up to N1 million, repayable over three years while manufacturers can secure up to N1 billion for working capital or machinery, with repayment periods of one year for working capital or five years for machinery/equipment.

The grant serves as economic relief for small businesses

The primary goal of this initiative is to alleviate the economic strain placed on small businesses by the recent policy changes, particularly the removal of fuel subsidies. By providing financial aid, the program aims to encourage entrepreneurship, foster job creation, and support sustainable business growth. This move is also seen as a step towards enhancing the resilience of the Nigerian economy, particularly in supporting the backbone of the business sector – the small and medium enterprises.

How to make the most of this opportunity

Firstly, you have to stay Informed, that is regularly check the official website for updates and application guidelines. Then, you prepare your documentation, this is ensuring all required documents, including proof of business and identity, are ready. You also have to understand the terms and be clear about the loan terms, interest rates, and repayment schedules.