SMEDAN Unveils N500m Interest-Free Revolving Fund to Support Nigerian MSMEs

By Iyojo Ameh

The Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) has launched a N500 million interest-free revolving loan scheme aimed at improving access to affordable financing for Micro, Small and Medium Enterprises (MSMEs) across the country.

The Director-General of SMEDAN, Charles Odii, announced the initiative, known as the Grow Fund for Small Businesses in Nigeria, during an engagement with market traders on Monday.

Odii explained that the agency decided to establish the fund after engaging directly with traders to better understand the challenges confronting entrepreneurs.

“We visited traders at one of the markets today because it is not enough to sit in offices and make policies without understanding their realities,” he said.

“Many of the challenges they raised border on financing, which is why we are launching the Grow Fund for Small Businesses in Nigeria.”

He noted that access to affordable finance remains a major barrier to the growth of Nigeria’s MSME sector, as many entrepreneurs are unable to secure conventional bank loans due to high interest rates, stringent collateral requirements and other lending conditions.

According to the SMEDAN boss, the interest-free loans will enable beneficiaries to increase their working capital, purchase equipment and business tools, and secure suitable workspaces to expand their businesses.

Unlike previous intervention programmes where funds were disbursed directly to individuals, Odii said the agency would channel the loans through registered business and trade associations.

“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 stated.

He explained that the association-led model was adopted to strengthen transparency, improve loan recovery and ensure that the revolving fund remains sustainable.

Odii added that repayments from beneficiaries would be recycled to finance additional businesses, allowing thousands of entrepreneurs across the country to benefit from the programme over time.

The initiative forms part of SMEDAN’s broader efforts to promote entrepreneurship, stimulate job creation and increase the contribution of the MSME sector to Nigeria’s economic growth.

Stakeholders have consistently identified access to affordable financing as one of the biggest constraints facing small businesses, making the agency’s latest intervention a significant step toward expanding opportunities for entrepreneurs nationwide.