How to obtain N10,000,000 CBN Loan....Without Collateral

N10M 5% LOAN - WITHOUT COLLATERAL

Introduction

The Central Bank of Nigeria has started disbursing its N200bn Loan portfolio meant to empower the Agricultural, Small and Medium Enterprises in Nigeria.  This loan is meant for the low echelon of the productive sector in Nigeria dominated by Artisans and peasant farmers.  The loan is collateral-free and would be accessed through cooperative organisations.

In the words of the  Isaac Okorafor, Director, Corporate Communications Department of the CBN, who said the bank seeks to promote Financial Stability and Economic Development, he also called on the youth to embrace farming activities and make money out it.  He said the bank is hoping to encourage artisans, including people into vulcanising works, hairdressing and barbing among others, especially those who employed others to work with. 

 “If you empower this group of people, the economy will move faster because they will also employ others," he said. He added that they were discouraged to apply for the loan because they would not be able to access such in commercial banks, where they needed to have collateral. “This is the reason why we made the provision for this loan for them to access through their cooperative organisations. All they need to do is to open an account with a bank, operate it for some time and apply. 

The loan is without collateral and the interest is only five per cent," he said. Okorafor also called on the youth to embrace farming activities and make money out it. “In CBN, we do not give grant to people, but we show you the way to follow and make money,” he said. 

Agric, Small and Medium Enterprise Scheme AGSMEIS is the Bankers’ Committee’s initiative aimed at complementing the efforts of the Federal Government in promoting agri-business as well as small and medium-sized enterprises.

Obtaining the Loan

The primary requirement for this Loan is that the entrepreneur, artisan or farmer must have started his or her business in a small scale, with evidence of what he has done, and what he is currently doing.  Keep proper business account records of your business.  Ensure full and detailed record-keeping, showing production cost analysis, monthly income and expenses, etc, before a loan could be approved.  

Who is eligible for AGSMEIS Loan

1. Artisans: vulcanising works, hairdressing and barbing

2. Farmers and those in Agricultural businesses

3. Small schools and other budding Educational institutions

4. Entrepreneurs in pharmacy and other Healthcare services

5. Services,(Hospitality, Restaurants, Catering, Services, etc.),

6. ICT,

7. Manufacturing / Production,

8. Mining, Creative Industry (Fashion, Design, Crafts, Entertainment, etc.), etc.

9. Cottage Industries

10. Trade and general Commerce

11. Renewable energy/energy-efficient products and technologies

12. Other income-generating projects as may be prescribed by the CBN

Basic requirements

To access AGSMEIS loan, there are some conditions that must be met.

1. Interested applicant must have been trained by an Entrepreneur Development Institute (EDI).  The Entrepreneurship Development Institute will assist you in implementing the business plan and commercially delivering business support services.

2. The interested applicant will apply for the loan via an EDI

3. The applications will then be sent to CBN for processing.  Applicants will be called for an interview regarding his/her business and those qualified will be contacted and given the loan.

Interest rate is 5% per annum 

The tenor is 7 yrs

The moratorium is 18 months

Other Requirements before final approval /disbursement 

1. Registered business with CAC

2. Evidence of tax payments 

3. BVN 

4. Letter of Guaranty - Your friend or spouse can write the guaranty letter. 

5. Certification by an EDI

6. Passport photo of you and guarantor

7. A valid ID card ( Get them ready)

8. Letter of Introduction  -  Those qualified to write a letter of introduction include:

Your Pastor 

Chief Imam 

LGA Chairman 

CDA Chairman 

Village Head

Senior Civil Servants Level 14 above

MD of Blue Chip Companies

Get trained - CBN’s Entrepreneurship Training Program

The Entrepreneurship Development Training involves 6 weeks of proper classroom training on several Business Development Program packages delivered by seasoned and experienced business facilitators and specialists.

This is followed by another  6 weeks of internship.

The training is designed to help full-fledged and aspiring entrepreneurs write bankable business plans and gain quality skills to improve their brands.

The Target Beneficiaries: People who want to:

Generate business ideas

Be self-employed / start a new business

Produce bankable business plans

Expand existing businesses

Obtain loans for their businesses

Training Duration: Graduates - 6 weeks | Non-Graduates - 10 weeks

List of CBN EDC Centres in Nigeria and their addresses :

CBN-EDC, Lagos

Centre for Entrepreneurial Development

36, Murtala Mohammed International

Airport Road, Lagos.

CBN-EDC, Ibadan (South West)

Address: Old SDSTC (Oyo Oodua Skill Acquisition Centre Premises),

Samonda, along Sango-UI Road,

Ibadan, Oyo State, Nigeria.

CBN-EDC, PortHarcourt (South-South)

30 Trans-Woji road, Grace plaza, by Slaughter Bridge Woji Town,

Port Harcourt, Rivers State

CBN-EDC, Maiduguri (North-East)

Address: Old Informatics Institute, Njimtillo, Kano Road,

Maiduguri, Borno State

CBN-EDC, Kano (North West)

Address: Murtala Muhammed Library Complex,

Kano, Kano State

CBN-EDC, Makurdi (North Central)

Off Jonah Jang Crescent,

Near Federal Secretariat,

Makurdi, Benue State.

CBN-EDC, Minna (North Central)

Address: Minna Innovation Institute,

Behind Niger State Sharia Commission,

Justice Ndajiwo Drive,

Minna, Niger State.

CBN-EDC, Enugu (South East)

Address: Ebenezer Villa Suite

8, Ogenyi Close, Off Cornerstone Avenue

Off Nike Lake Resort Road,

Enugu, Enugu State.

CBN SUPPORT FOR MICRO BUSINESSES

As a complement to its microfinance policy, the Central Bank of Nigeria [CBN] in 2006 initiated plans to support the efforts of the Small and Medium Enterprises Agency in Nigeria by establishing one CBN approved Entrepreneurship Development Centre [EDC] in each of the six geo-political zones in Nigeria.

The CBN EDC Centres provide physical structures, training materials, and training by competent specialists with a view to equipping entrepreneurs with management and financial resources capacity to manage their enterprises.  This is to encourage: 

1. Private entrepreneurship, self-employment, job creations, income growth, poverty eradication and economic development.

2. To develop entrepreneurship spirit amongst Nigerians and provide insight into the tools, techniques and framework for managing all functional areas of business enterprise, including production, marketing, personnel and finance.

3. To develop skills of would-be-entrepreneurs to successfully start, expand, diversify and manage business enterprises as well as link them with financial institutions.

4. To generate employment opportunities for Nigerians in pursuance of the provisions of the National Economic Empowerment and Development Strategy [NEEDS] and recently vision

2020.

5. To raise a new class of entrepreneurs/owners, who can compete globally and succeed in managing MSMEs and provide the bridge for future industrialization of the country.

Conclusion

This is a well-structured entrepreneurship promotion scheme by the CBN.  I want to encourage everyone in the SMEs sector to give it a shot.  However, you have to open a bank account and have an existing relationship with a bank.  

Preferably you should open a business account with the bank and get to know the bank and its staff.  The bank will expect a financial report of your business undertaking for at least one or more years, showing your present income, cost, and profit.  The report should allow them to assess the profitability of your business.

Do you find any of the requirements difficult, let's know your opinion.

FIRE...