SMEDAN Unveils ₦500m Zero-Interest Fund for MSMEs

The Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) has launched the Grow Fund for Small Businesses in Nigeria, a ₦500 million zero-interest revolving loan scheme aimed at improving access to finance for Micro, Small and Medium Enterprises (MSMEs) across the country.

The Director-General of SMEDAN, Charles Odii, unveiled the initiative in Abuja as part of activities marking the 2026 World MSME Day.

Odii explained that the intervention is designed to tackle one of the biggest challenges facing small businesses in Nigeria by providing affordable financing without interest charges.

Unlike conventional loan programmes, the fund will not be disbursed directly to individual entrepreneurs. Instead, it will be channelled through cooperatives, trade unions, business member organisations and registered associations.

According to the SMEDAN boss, the association-based model is intended to improve accountability, enhance loan recovery and ensure that the funds reach genuine business owners.

“We visited traders at one of the markets today to engage directly with them because it is not enough to sit in offices and make policies without understanding their realities. Many of the challenges they raised border on financing, which is why we are launching the Grow Fund for Small Businesses in Nigeria,” Odii said.

He stated that beneficiaries would be able to use the facility to strengthen working capital, acquire business tools and equipment, as well as secure workspaces needed to expand their operations.

“We are not giving the money to individuals directly. We are giving it to associations that understand their members and can manage the funds responsibly,” he added.

Odii disclosed that repayment terms would be determined in consultation with each participating association, allowing for flexible arrangements that would sustain the revolving nature of the fund and enable more entrepreneurs to benefit over time.

He further revealed that the initial ₦500 million fund is expected to grow through partnerships with state governments, development agencies and other institutions willing to provide matching contributions.

According to him, expanding the funding pool will increase the number of MSMEs that can access affordable financing across the country.

The SMEDAN Director-General also announced that the agency is reviewing the draft National MSME Policy before forwarding it to President Bola Tinubu for approval.

He said the proposed policy reforms include provisions for single-digit interest loans for MSMEs, reserving 30 per cent of government procurement opportunities for small businesses, and removing age restrictions from government intervention programmes to allow more entrepreneurs to benefit.

Odii expressed optimism that the initiatives would strengthen Nigeria’s MSME sector, boost job creation, stimulate economic growth and improve the sustainability of small businesses nationwide.