The best SME loans in Nigeria provide the capital you need to grow your business and satisfy your customers better. You could get better packaging items, machines, and other equipment your business needs with a lump sum of money. And these loans can also provide some foundation for a new business.
You might be wondering where you can get this type of loan and if you meet the eligibility requirements.
This guide will calm your worries by taking you on a deep dive into the best SME loans in Nigeria.
What Are the Requirements for SME Loans in Nigeria?
To get an SME loan in Nigeria, there are some requirements you need to fulfil. They are as follows:
- You should be 18 years and above.
- You should have a valid identity card. This could be a National ID, a permanent voter’s card, a driver’s licence, or an international passport.
- Own a bank verification number BVN.
- Have a property (e.g., real estate) as collateral. This isn’t compulsory on all types of SME loans.
- Your business should be registered with the Corporate Affairs Commission (CAC).
- Have a tax identification number.
Where to Find the Best SME Loans in Nigeria
In Nigeria, the best SME loans can be gotten from commercial banks, microfinance banks, cooperative societies, and online loaning apps.
Here is a breakdown of the types of SME loan products that you can get from each of these.
Commercial Banks Offering SME Loans in Nigeria
These banks have established SME lending programmes and may offer various loan products. These loan products are tailored to the specific needs of small and medium-sized businesses. Some of the conventional banks that offer loans for SMEs in Nigeria are as follows:
Jaiz Bank is a non-interest bank in Nigeria that operates based on Islamic banking principles. They offer SME financing solutions that comply with Shariah principles.
The various financing options available are Murabaha (cost-plus financing), Ijarah (leasing), and Musharaka (partnership). These products are designed to support the growth and development of SMEs while adhering to Islamic banking principles.
Also, both Muslims and non-Muslims can benefit from SME loans from this bank.
Visit Jaiz Bank
First Bank of Nigeria
First Bank of Nigeria Is another commercial bank that offers one of the best SME loans in Nigeria. They’ve helped entrepreneurs and small businesses grow in Nigeria with their loan products.
They offer competitive interest rates, flexible repayment terms, and personalised financial advisory services. All of these help to support the success of SMEs.
APR: 5% monthly
Visit First Bank
Guaranty Trust Bank (GTBank)
GTBank offers SME loans to support the growth and development of small and medium-sized enterprises in Nigeria. Their loan products cover a great portion of the financing needs of a business.
GTBank provides competitive interest rates and convenient repayment plans. You’d also get personalised financial solutions to meet the unique requirements of your business.
APR: 4.95% monthly
United Bank for Africa (UBA)
UBA provides SME loans to support the expansion and development of small and medium-sized enterprises in Nigeria. With their loan products, you’d get flexible repayment terms and competitive interest rates. You’d also need collateral to be eligible.
APR: 2.5% monthly
Zenith Bank is another commercial bank that offers SME loans to support the growth and development of small and medium-sized businesses.
Their loan products cater to various financing needs, including working capital, asset acquisition, business expansion, and trade finance.
Zenith Bank provides competitive interest rates, flexible repayment terms, and personalised financial solutions.
APR: 23% to 34% per annum
Visit Zenith Bank
Stanbic IBTC Bank
You can think of Stanbic IBTC Bank when looking for commercial banks that provide SME loans with good interest rates. They support the growth and development of small and medium-sized enterprises in Nigeria.
Stanbic IBTC Bank offers flexible repayment terms and tailored financial solutions to aid in the achievement of your business goals.
APR: 3.0% per month
Visit Stanbic IBTC Bank
Fidelity Bank also offers one of the best SME loans in Nigeria to support small and medium-sized enterprises. Their loan products include working capital finance, asset acquisition, business expansion loans, and trade finance.
Fidelity Bank offers competitive interest rates, flexible repayment options, and personalised financial advisory services.
APR: 10% per annum
Visit Fidelity Bank
Union Bank of Nigeria
This bank is popularly known by the slogan ‘big, strong, reliable…” They provide SME loans to support the development of businesses. Their loan products include general loan products for SMEs at almost all the commercial banks in Nigeria.
APR: 16% to 19% per annum
Visit Union Bank
Ecobank Nigeria is another bank that offers SME loans to support small and medium-sized enterprises in Nigeria.
Aside from their loan products, which meet the needs of many SMEs in Nigeria, they also offer advisory services and support. This helps SMEs who take out loans manage their finances effectively and achieve their business goals.
Visit Ecobank Nigeria
Microfinance Banks Offering SME Loans in Nigeria
In Nigeria, microfinance banks play a crucial role in providing financial services to individuals and small and medium-sized enterprises (SMEs). They are a great choice for individuals who may have limited access to traditional banks.
To be eligible for an SME loan from a microfinance bank, you typically need to meet certain requirements. They include having;
- a viable business plan
- a good credit history
- collateral (depending on the loan amount).
They also want to see your demonstrated ability to repay the loan. Here are some microfinance banks you can access for the best SME loans in Nigeria.
Development Bank of Nigeria (DBN)
DBN is a development finance institution established to provide sustainable financing for small businesses in Nigeria. They partner with commercial banks and microfinance institutions to offer affordable loans to SMEs.
DBN’s interest rate for SME loans is about 12.5% per year. You can get up to 22 million naira in loans for your business.
LAPO Microfinance Bank
LAPO Microfinance Bank is a leading microfinance institution in Nigeria. They provide financial services, including loans, to micro, small, and medium-sized enterprises. There’s no collateral needed, and the interest rate is about 5% per month. Plus, you can get up to 500,000 naira in loans for your business.
Visit LAPO Microfinance Bank
Accion Microfinance Bank
Accion Microfinance Bank is another place to get SME loans in Nigeria. They focus on providing financial services to micro and small businesses. They offer various loan products that are tailored to the needs of small businesses.
The interest rate to expect on SME loans from Accion Microfinance Bank is about 8% per month. You can access up to 150,000 naira on the platform. However, the loan term is between 1 and 3 months.
Visit Accion Microfinance
The Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) is a government agency that supports the development of SMEs. They provide access to finance through partnerships with financial institutions and have programmes to facilitate SME financing.
Most SME loans from SMEDAN have a small interest rate of about 5% on the principal amount for the entire term of the loan. So, if you get a loan of 2 million Naira to be paid within 36 months, then you’d be paying a total of 2.1 million Naira within the 36 months.
Seedvest Microfinance Bank
Seedvest Microfinance Bank provides financial services to micro and small businesses in Nigeria. This includes SME loans, working capital financing, and asset acquisition loans.
The interest rate per year on the SME loans is about 8%. You can get up to 30 million naira in SME loans on the platform.
BoI (Bank of Industry)
The Bank of Industry, as the name implies, is a Nigerian development finance institution that offers various loan programmes for SMEs. They provide long-term financing, project financing, and working capital loans to support SME growth.
The SME loans at the Bank of Industry are 10% for term loans and between 12% and 15% for working capital. However, the sectors given preference for SME loans are agro-allied, polymer-based, solid minerals, and ICT.
Online Loan Platforms Offering SME Loans in Nigeria
In addition to banks, there are also non-banking financial institutions and lending platforms in Nigeria that provide SME loans. These institutions often have different eligibility criteria and loan terms compared to traditional banks. However, here are a few documents that apply to most of them:
- Business registration certificate: you can obtain this from the Corporate Affairs Commission (CAC).
- Bank statements: Statements from your business bank account showing your financial transactions and cash flow.
- Financial statements: These include income statements, balance sheets, and cash flow statements that provide an overview of your business’s financial health.
- Valid identification: Personal identification documents such as a national ID card, driver’s licence, permanent voter’s card, or international passport.
- Proof of address: Documents that verify your residential or business address, such as utility bills or a tenancy agreement.
- Business plan: A detailed plan outlining your business objectives, strategies, and projected financials.
- Collateral documents (if applicable): This depends on the loan amount and terms you may need. Collateral documentation includes property titles, vehicle ownership papers, or other assets.
Here are a few examples of online platforms to access SME loans in Nigeria:
To access SME loans from RenMoney in Nigeria, you need to meet their eligibility criteria and gather the required documents. Next, complete the loan application online and provide the necessary information and supporting documents.
If approved, you’ll receive the loan offer. The funds will be disbursed to your business account for use in growing your SME. You can access up to 6 million naira within 24 hours on this platform.
APR: 30% to 90%
GroFin is a development finance institution that offers finance and support to small and medium-sized businesses across various sectors. To access the loan, visit their website and fill out the loan application form. Upload the necessary documents for verification and await approval.
Once approved, your funds will be credited to your bank account. Loan applicants can get between $100,000 and $5 million in business financing. However, your business must be operating in agriculture, health care, manufacturing, or key services such as recycling.
Aella Credit is a fintech company that provides loans to individuals and small businesses. They have a quick loan application process and offer competitive interest rates. You can earn up to a million naira on this platform.
APR: 6% to 20%
Carbon (formerly Paylater)
Carbon is a digital lending platform that provides quick loans to individuals and small businesses. Their loan products are accessible through their mobile app. You can download their app via the Play Store or Apple Store. With Carbon, you can access up to 20 million naira in SME loans.
APR: 1.25% monthly
Lidya is an online platform that offers working capital loans and asset financing to small businesses in Nigeria. They leverage technology and data to provide faster loan processing. You can get your hands on a 500,000 naira loan and up to 18,000,000 naira within 48 hours.
Branch is another mobile lending platform that offers loans to individuals and small businesses in Nigeria. Their loans are accessible through their mobile app. The loan limit for a new user on the app is 150,000 naira.
APR: 14% to 28%
How To Get SME Loan In Nigeria
Having understood the eligibility requirements for an SME loan and the best SME loans in Nigeria, here’s how to access it.
- Meet up with the general eligibility requirement.
- Visit any of the above-listed platforms for the best SME loans in Nigeria.
- Apply for an SME loan and await approval.
- You can receive the loan in less than 48 hours.
Other Ways To Fund Your Business Besides SME Loans
It is possible that SME loans aren’t what your business needs at the moment. Here are other ways to get funds for your business:
- Apply for business grants.
- Start affiliate marketing.
- Use crowdfunding.
- Consider angel investors.
- Get access to a venture capitalist.
- Use a business partner.
When it comes to finding the best SME loans in Nigeria, it’s crucial to thoroughly evaluate your business needs. You also need to compare multiple lenders and consider factors such as interest rates, repayment terms, and customer support. It’s important to remember that the best loan option will vary depending on your specific circumstances.