Nigeria currently offers a wide range of financing options for Micro, Small and Medium Enterprises (MSMEs), driven largely by government-backed schemes and selective commercial and microfinance bank products.
Interest rates vary across providers with intervention funds being the cheapest, while commercial and digital lenders trade speed and flexibility for higher pricing.
Most government and development finance loans sit between 5% and 9% per annum, making them the most affordable options for eligible businesses.
Commercial banks typically charge higher rates, usually above 18% annually, while microfinance and online lenders record the highest effective costs.
Below is a breakdown of some of the most MSME-friendly loan options available in Nigeria right now.
Key Considerations for MSMEs
- Government and Development Finance Loans: Facilities from the Bank of Industry (BOI) and NIRSAL Microfinance Bank offer the lowest rates. However, applicants must meet strict eligibility conditions, including business registration, sector focus and, in some cases, compulsory training.
- Commercial Bank Loans: These come with higher interest rates but usually allow larger loan sizes and faster processing, especially for existing customers with strong account history.
- Microfinance and Digital Lenders: They provide quick access and minimal collateral requirements, but interest rates are often significantly higher when calculated annually.
- State-Specific Funds:
Schemes such as the Lagos State Employment Trust Fund (LSETF) remain among the most competitive for businesses operating within Lagos State.
The Top 10 MSME-Friendly Loans in Nigeria
1. FGN Bank of Industry (BOI) MSME Fund
This fund targets small and medium-scale enterprises across priority sectors. Interest rates range between 5% and 9% per annum, with a maximum loan size of ₦10 million per applicant.
Detailed application guidelines are available on the Bank of Industry’s official website.
2. AGSMEIS Loan (NIRSAL Microfinance Bank)
The Agri-Business/Small and Medium Enterprise Investment Scheme (AGSMEIS) is an initiative of the Bankers’ Committee and the Central Bank of Nigeria. Loans are disbursed through NIRSAL Microfinance Bank.
Applicants can access up to ₦10 million at 9% interest per annum, with a tenor of up to seven years and an 18-month moratorium. No physical collateral is required.
Eligible businesses span agribusiness, manufacturing, mining, ICT and the creative sector.
Eligibility Highlights:
Applicants must operate a registered business, possess a BVN and valid ID, complete mandatory EDI training, submit a viable business plan and have no outstanding loans under similar intervention schemes.
Application Process:
Applications are completed online through the NIRSAL MFB portal, following compulsory EDI training and document submission.
3. Lagos State Employment Trust Fund (LSETF)
Established under the Lagos State Employment Trust Fund Law of 2016, LSETF provides funding to Lagos-based MSMEs to support job creation and enterprise growth.
The fund offers loans at 5%–9% interest, with a maximum facility of ₦5 million, strictly for Lagos residents and businesses operating within the state.
4. UBA Micro Business Loan
UBA’s Micro Business Loan provides funding of up to ₦5 million for MSMEs across trade, services and agribusiness. Interest is typically around 0.75% monthly (approximately 9% annually).
Applicants usually need an existing UBA account and can apply via branch, mobile app or USSD channels. Repayment structures are often tailored to business cash flow.
5. Wema Bank Female Support Loan (SARA by Wema)
Wema Bank’s SARA initiative supports female-owned businesses with access to finance, training and mentorship.
Loans are offered at single-digit interest rates, generally around 9%, often without collateral. While maximum loan size varies, the scheme focuses on long-term business growth and financial inclusion for women.
6. BOI Microfinance Bank (BOIMFB)
BOIMFB provides working capital loans to MSMEs, typically priced at about 4% monthly on a reducing balance.
Facilities are short-term, usually up to 12 months, and designed for businesses with at least one year of operating history. Collateral requirements are flexible.
7. Access Bank SME Loans
Access Bank offers multiple SME loan products, including instant and sector-specific facilities.
Requirements generally include CAC registration, BVN, TIN, consistent turnover and a minimum operating history of one year. Interest rates vary by product, with personal guarantees commonly required.
8. FCMB BOI Gender Loan / SheVentures
FCMB supports women-owned businesses through its SheVentures platform and BOI-linked gender funds.
Options range from zero-interest loans up to ₦10 million (short tenor) to larger BOI-backed facilities of up to ₦300 million at 16% per annum. Mandatory training applies to most schemes.
9. Baobab Microfinance Bank SME Loans
Baobab offers tiered loan products for businesses with at least one year of operation.
Loan sizes range from ₦50,000 for mini micro loans to ₦150 million for SME facilities, with tenors extending up to 60 months. Interest rates and requirements vary by loan category.
10. Stanbic IBTC SME Short-Term / TOD Loans
Stanbic IBTC provides short-term business loans and overdraft facilities.
SMEs typically require a minimum of six months’ account history, CAC registration, financial statements and tax records.
Some instant loan products attract interest of about 4% per month, with tenors usually capped at 12 months.
It is important to note that loan terms, interest rates and eligibility requirements are subject to change. MSMEs are advised to confirm current conditions directly with the respective banks or fund administrators before applying.
