Have you noticed that everyone has a small or micro business now? From the Iya Bobo that sells drinks to Abdullahi’s provision store, small and micro businesses are constantly popping up everywhere, even on Instagram. That’s why it’s no surprise that there are over 37 million MSMEs and SMEs in Nigeria🤯.
The Nigeria bureau of statistics has stated that these MSMEs and SMEs contribute to over 50% of the country’s GDP employing about 80% of the country’s workforce. Despite this, MSMEs and SMEs still struggle to access adequate credit, with only about 5% of these businesses having access to funding and credit.
These statistics are probably not so far-fetched as you may know a few yourself that haven’t been able to get credit. For this reason, many business owners have had to squeeze themselves dry to get started. They used their savings, borrowed money from family and friends, and even sold properties just to get some capital. Truth be told, finding credit can seem like looking for a needle in a haystack, but it doesn’t have to be.
In this post, we’ll teach you how to get a small business loan in Nigeria, so your small business can expand and truly reach its potential. If you are new to the business world, we will also talk about ways to obtain a loan for startup business in Nigeria.
Access to small business loans, especially business loans without collateral is not as common as most would think, but there are still a few safe and secure ways to get loans. We’ve outlined the main ones below.
This is the fastest and most common way of getting a loan for start-up businesses in Nigeria. Loan apps usually take about 5 – 10 minutes to decide on your loan package and if you should be given a loan. Loan amounts range from ₦250,000- ₦10,000,000. Majority of the time, these apps don’t require collateral & offer collateral free loans for business. They only use your credit score to determine if you are likely to pay back.
Before loan apps, banks were the number one place small business owners who wanted to grow their businesses go to get loans. Although they are trustworthy, loans from banks usually come with high-interest rates and a request for collateral. This often discourages startups from getting loans. However, start-ups can request business loans from banks, if the owners have a good track record and can provide sufficient collateral.
The Nigerian government has established a few bodies to help MSMEs and SMEs. Examples of these bodies are the Bank of Industry (BOI), Bank of Agriculture (BOA), Development Bank of Nigeria (DBN), Nigerian Export-Import Bank (NEXIM), and Small and Medium Enterprises Development Agency of Nigeria (SMEDAN).
They were established to give grants, and low-interest loans to MSMEs and SMEs in Nigeria. Here are their pros and cons.
Loan apps in Nigeria are known for their speed when it comes to loan approval and disbursal. They don’t require you to go to a place or present numerous documents. All you need to do is download the app, sign up and request a loan.
This is especially good for small businesses that need money to sort out business emergencies or for businesses just starting out with no social proof and no collateral.
Here is a list of the top loan apps that give loans without collateral:
These apps have made it possible for the average credit-worthy Nigerian to start and grow business/businesses in Nigeria.
For more information about FairMoney SME loans, see the FAQs below. You can also check out about our SME loans here.
What is the maximum loan amount that FairMoney provides for small business loans?
FairMoney is able to give small businesses loans of up to ₦5,000,000
What documents are required to apply for a small business loan?
We need things like your BVN, your business name, and other personal information.
How can I apply for a small business loan with FairMoney?
To get a loan with FairMoney, all you need to do is download the app here.
How long does it take to get a small business loan from FairMoney?
Are small business loans collateral-free in FairMoney?
Yes, there are. Check out more details here.