Loans & Grants Archives - SME Finance

D-Prize $20,000 Challenge for Social Entrepreneurs

In a bid to expand access to poverty-alleviation interventions in the developing world, the D-Prize Challenge promises to give entrepreneurs and the most promising teams up to $20,000 USD to launch a pilot version of their chosen solution to poverty wherever extreme poverty exists.

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To apply for the $20000 D-Prize, Entrepreneurs and participating teams are expected to pick from any of these already proven poverty solutions in need of greater distribution or propose their own challenge (if you know of another proven intervention that needs more distribution) and send a concept note and resume(s) for the first stage, subsequent stages come with more requirements for entrepreneurs that qualify.

The featured challenges include;

  • CHLORINE DISPENSER CHALLENGE:

Can you distribute community chlorine dispensers and teach people to use them?

  • SUGAR DADDY AWARENESS CHALLENGE:

Can you teach “sugar daddy awareness” classes to girls in need?

  • QUALITY INPUTS CHALLENGE:

Can you distribute a bundle of proven agricultural inputs and teach farmers to use them to grow more?

  • CUSTOM AGRICULTURE CHALLENGE:

D-Prize is specifically interested in distributing proven agriculture interventions to smallholder farmers. If you know of a highly-effective intervention that is backed by credible evidence, we want to hear your plan to increase its distribution.

  • SOLAR LAMP CHALLENGE:

Can you sell solar lights to rural or slum-dwelling households in need?

  • SELF-INJECTABLE CONTRACEPTIVE CHALLENGE:

Can distribute Sayana® Press to underserved women through a private health network?

  • OXYGEN CHALLENGE:

Can you develop a team of technicians to service existing oxygen concentrators?

  • PATIENT IDENTIFICATION CHALLENGE:

Can you create a way to identify patients and connect them to early treatment solutions?

  • MATERNAL HEALTH CHALLENGE:

Can you develop an organization to train birth attendants to administer misoprostol?

  • VOLUNTARY MEDICAL MALE CIRCUMCISION CHALLENGE:

Can you develop an organization to identify candidates for VMMC and connect them to health facilities?

  • PREVENTION OF MOTHER-TO-CHILD TRANSMISSION CHALLENGE:

Can you prevent mother-to-child transmission (PMTCT) of HIV by helping HIV-positive pregnant women adhere to an ART regimen?

  • CHILD IMMUNIZATION CHALLENGE:

Can you direct 500 caregivers (parents or other guardians) to bring their infants to health facilities for routine immunizations that otherwise would not occur?

  • TEACHING AT THE RIGHT LEVEL CHALLENGE:

Can you implement an effective TaRL (Teaching at The Right Level) program to teach students in a resource-limited classroom?

  • GOVERNMENT TRANSPARENCY CHALLENGE:

Can you improve transparency and report data on public service performance?

ELIGIBILITY

D-Prize is for aspiring entrepreneurs from anywhere in the world, of any age, and any background.

Existing organizations would be considered for funding only if they are piloting a new distribution-focused initiative, and need high-risk capital.

HOW TO APPLY

Click on the link below to learn more about the challenges and to apply – https://d-prize.org/#challenges

APPLICATION DEADLINE

Early Submission Deadline: October 18th, 2020 at midnight PT (pacific time)

Regular Submission Deadline: November 8th, 2020 at midnight PT (pacific time)

Extension Deadline (limited to 200 people who register): November 29th, 2020 at midnight PT (pacific time).

How To Get A Business Loan Through SMEDAN

Did you know you could apply for a business loan through SMEDAN?

Well, the agency which is responsible for the development of MSMEs in Nigeria has created a portal that makes it super easy to get business loans and other types of loans too. SMEDAN is an acronym for Small and Medium Enterprise Development Agency of Nigeria. It was established in 2003 to help MSMEs grow faster by providing them with the right tools and access to internal and external sources of finance, appropriate technology, technical skills etc.

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SMEDAN Business loans are mainly low-interest loans sourced from different loan providers which can be offered to businesses with different needs.

Step-By-Step Guide to Getting a Business Loan from SMEDAN

The following steps would help guide to on how you can get a SMEDAN loan for your small business:

  1. Click here to open SMEDAN’s Credit Information Portal.
  2. Fill out the Eligibility form; you would be required to choose the purpose of the loan the age of your business and the business owner, location and loan amount.
  3. After filling out the form click on ‘Check Availability’; you would be able to see a list of loans from different financial institutions that fit your requirements.
  4. Go through the loan search results. You will see different loans with a different requirement for each of them. Once you find the one that fits your needs simply click on “View details and apply.”
  5. The next step is to click on “Get started.”  A window will appear with a Credit Application form. Fill out the form with details like your business name, personal information, SMEDAN ID etc. then click ‘submit information’.

NOTE: That the SMEDAN Credit Information Portal is currently limited to 3 states; Lagos, Kaduna, Abuja due to the fact that it is in its pilot phase with other states expected to be added in the next phase of the project.

We advise you to use a PC to apply for the loan for a smoother experience.

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3 Mistakes Small Businesses Make When Applying for Loans

Applying for a loan can be a challenging process. It requires your time, commitment and best efforts and even then, your request can still be denied.

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To help you present a better business loan application and increase your chances of success when next you apply for that loan, here are 3 common mistakes small business owners make when applying for loans.

  1. Poor Preparation– Majority of small business owners don’t take time to prepare their businesses for the loan process. This lack of preparation shows when they rush to the bank or any other lender immediately they’ve made up their minds to apply for a business loan. This is one of the common mistakes small business owners make. Typically a business ought to be prepared to provide an up-to-date financial statement and business plan. They have to have done sufficient research to know what their personal and business credit score is, so they know where they stand, what the lender’s requirements are, the exact amount they need for their business and a plan for how they intend to spend it and repay their lender. When your lender does not see a convincing level of preparation then there is a high chance that your application would be denied.
  2. Choosing The Wrong Lender/Loan Type– You cannot walk in to the first bank you see or that is most convenient for you to apply for a business loan and expect the best offer. You have to carry out an extensive research on all your available loan options to avoid the mistake of choosing a wrong lender and loan type for your business. Some lenders are better suited for some type of businesses than others, some loan types are better suited for your current business financing needs than others when you don’t choose the proper lender and loan type for your business you stand more chance of having your loan application rejected, paying higher costs in interest rate, and time. This is why it is important that you invest time into seeking out the most suitable lender and loan type for your business.
  3. Seeking Finance When It is Too Late – When business owners wait till it is too late to ask lenders for finance, they become desperate in the process. This makes it easy for them to make more mistakes along the way and this desperation is clearly seen by their lenders which definitely has a negative impact on their application. Waiting till the 11th hour when your business has a very short runway to seek a loan is a deadly mistake that almost always guarantees that your application would be denied. Stay on top of your finances and know what the financial health of your business would look like months ahead and make adequate preparations to meet its financing needs before it is absolutely necessary.

The first step to avoiding most business loan mistakes is to prepare yourself for the process and the requirements. This will help you choose the right lender and loan type, and present a more convincing loan application and stand a better chance of succeeding in your business loan application.

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Enugu State Offers Collateral-Free Loans

The Enugu state SME centre which was set up to drive the state’s enterprise growth, job creation, and spur economic development  is collaborating with Lidya Bank to offer collateral free loans for SMEs.

The loan which is a 30-day cash advance that’s decided based on the recipient’s 3-month bank statement would not require any co-signers or guarantors.

It is to be repaid within 30 days of being received by the applicant and can be renewed every 30 days. Upon timely repayment, the beneficiary can apply for another loan with a longer tenor from Lidya Bank.

The 30-day loan has an interest rate of 3.5%. The amount to be repaid will depend on what’s advised by Lidya.

Eligibility

To qualify for the loan, businesses must:

  1. Have a business operational in Enugu State.
  2. Have a monthly turnover of at least ₦500,000 (proof in bank statement).
  3. Provide the following documents and information; Applicant’s full name, residential and business address, CAC Certificate, Bank Statement for the last months, Tax Identification Number (TIN),Copy of a government-issued photo ID (copy), Copy of a utility bill, Details of next-of-kin (name, relationship, address, phone number).

Application Process

  1. Apply for the Enugu State SME Support Service Loan by clicking here
  2. Fill your details in the application portal
  3. You will be contacted by Lidya for an over-the-phone assessment.
  4. Submit the documents required by Lidya.
  5. Receive the loan if your business qualifies.

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4 Reasons Your Small Business Loan was Denied

A few weeks ago, a friend called to say how devastated he was after he learnt that his loan application was denied, he was so livid he threatened to withdraw his business from the bank. Like him, many small business owners have experienced the pain and frustration that comes with a rejected loan application, but what is equally painful is that more often than not the reasons they’re given for the rejection is often vague which means they risk being rejected again since they don’t know why their request was turned down in the first place.

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To help you avoid that, I have highlighted 4 major reasons why your business loan application may be rejected:

  1. Poor Credit Score – Your business loan may be rejected because your business or you as the owner have a poor credit score. A credit score is a number from 300-850 created by analyzing your credit information to determine your creditworthiness. A high credit score indicates to lenders that you have a history of paying back your loans and vice versa. This is why you must ensure that your credit score is super high. But you must first determine whether you’ve a poor credit score. To get that information you can visit any of the credit bureaus in Nigeria like CRC Credit Bureau, Credit Registry Nigeria, etc. Sometimes, even a lack of credit history can be a problem because without one banks would not be able to determine if you’re credit worthy (especially when collateral is not available) or not. So have to build up your credit score by collecting smaller amounts in loans and repaying on time.
  1. Too Much Unpaid Debt – When you have a lot of unpaid debt and you’re requesting for a new loan, your lenders would typically be wary of lending you money unless they can determine that you’re capable of paying up their loans. To ascertain this, they check your debt-to-income ratio. Your debt-to-income (DTI) ratio, is a measure of how much you can afford to borrow. It not only shows lenders that you can pay your loan each month, but also that you’re responsible with your money. AndIf they are not sure that their loan can be recovered then your loan request would be rejected. To overcome this hurdle, ensure that your business does not have any outstanding loans that would make it difficult for you to get a new one.
  2. Poor Cash Flow – We have talked about the importance of cash flow to a business but it is also a very important metric to calculate lenders use to estimate your credit worthiness. Before your loan request is approved, lenders need to be certain that your cash flow is strong enough to cover your business expenses and have enough left to pay them back. A business with poor cash flow often indicates that it is not doing very well and this can raise a red flag for banks that fear that your business may collapse without repaying their loan. You have to improve your cash flow to be able to improve your chances of getting that business loan. Learn simple tips necessary to improve your cash flow today.
  3. Risky Industry – Some businesses are simply more likely to default on a loan and make a more risky investment for lenders because they operate in a high risk industry like restaurants. These businesses are usually avoided by banks and other lenders because of their high risk of failure. If you operate in such industries you have to be able to provide a strong application that can convince lenders that you can repay the loan you’re requesting.

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Startup Founders Can Now Apply for $20,000 Grant Facility

Ventures Platform, in conjunction with Acumen and LoftyInc, is calling on startup founders in Nigeria to apply for the Nigeria Impact Startup Relief Facility (NISRF). The program which aims to provide an equity-free grant of up to $20,000 aims to support businesses that are either being adversely affected or modified in response to COVID-19 for a period of six months.

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According to a national survey of SMEs conducted by the National Bureau of Statistics (NBS), the total number of SMEs in Nigeria as of 2019 stood at 41.5 million. Many of them are located in major cities like Lagos, Ibadan, Kano and Abeokuta.

The SME survey executed by PWC reported that SME’s contribute 48% to the national GDP and account for 96% of businesses as well as 84% of employment. This, in a nutshell, explains how very important SME’s are to the economy, job creation and national development in general.

As the economy struggles to adapt to a new normal necessitated by the COVID-19 pandemic, young startups and small businesses find themselves struggling to survive. While some are pivoting into new businesses, others have been forced to remodel their strategies to suit the new realities. Either way, startups and small businesses are being dealt harsh blows by all the disruption caused by the pandemic.

Venture Platform’s Nigeria Impact Startup Relief Facility could, therefore, be a source of huge relief for startups and founders that eventually benefit from the funds. To benefit, however, businesses need to meet the following requirements:

  1. Since the funding and other benefits are targeted at Nigerians, it simply follows that only startups and companies operating in Nigeria are eligible for it.
  2. Since the program targets high-impact businesses, to qualify, a startup has to prove that it is actually tackling an urgent social problem. This would determine the kind of impact it has or the kind of traction it has the potential to attract.
  3. The startup also has to be registered with the CAC per the Nigerian law. Then it must be at post-MVP (minimum viable product) stage (not in the development stage) as well as prove that it is already generating revenue.
  4. The company must also be able to show that it has solid and positive financial records before the pandemic. Its Accounting Rate of Return (ARR) has to be at least $60,000 (N23.1m) in a period of 12 months.
  5. The startup must have received seed funding to be eligible for the fund. It also has to demonstrate traction and scale of impact or at least a potential for future scale. The startups must also prove that it has optimised and maximised their resources during the COVID-19 lockdown.
  6. Only startups operating in the following sectors will be considered: Agriculture, Critical Infrastructure, Financial Services, Health Care, Education, and initiatives that target the informal sector.

If your startup fulfils all the requirements above, click on this link to start your application. The process commences on Monday, 24th August 2020, and will close on Friday, 7th of September 2020.

Successful founders and startups will also be entitled to business advisory and access to a pool of mentors and business advisors as well as business continuity.

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How To Apply For N500m Facebook Grant For Small Businesses

Facebook has opened the portal for its COVID-19 Grant programme aimed at supporting small businesses that were affected by the Global pandemic.

The social networking giant which has offered to support small businesses in over 30 countries (Nigeria included) with the sum of $100 million partnered with Deliotte Nigeria to support over 781 small businesses in Nigeria with 400,128 Naira in cash grants and 240,077 in advertising credits.

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Eligibility

To be eligible to apply, you must:

  • be a for-profit business
  • have between 2 and 50 employees
  • have been in business for over a year
  • have experienced challenges from COVID-19
  • be in or near a location where Facebook operates (all locations in Nigeria are eligible)

 

Requirements

You will be required provide the following documents in PDF formats

  1. Your most recent financial statements or accounts (Please ensure you provide full financial statements or accounts for your business. At a minimum, the financial statements you provide should include a balance sheet and an income statement/profit or loss statement. A balance sheet typically includes a summary of all of your business’ assets and liabilities. For example assets include items such as cash, balances due from your customers, buildings owned by your business, stock held by your business etc. For example, liabilities include balances due to your suppliers, loans due to financial institutions etc. An income statement/profit or loss statement includes a summary of your income, expenses and profit for a year. Abridged financial statements or accounts will not be accepted).
  2. Legal documents proving that your business has been established for at least one year e.g your annual tax returns, business registration documents (CAC), business licence or partnership agreement.

NOTE: You may be asked to provide further details and documents at a later stage in the process.

How to Apply

To apply please visit the application portal in the link below (Please note that portal will be open to businesses in Nigeria from 2pm on 24 August 2020 to 5pm on 04 September 2020).

Click here to apply: – https://everest.apply-aims-grants.com/AUUID/F73090F61

For enquiries please contact fbgrants@deloitte.ie

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Nigerian Banks Write off N1.9 trillion impaired loans in past four years

A minimum of N1.9 trillion impaired loans has been written off by commercial and merchant banks operating in Nigeria from their loan portfolio in the last four years, a report by Agusto & Co, a foremost rating institution in Nigeria, has disclosed.

Agusto & Co’s 2020 Banking Industry Report is the most current and comprehensive report on the banking industry in Nigeria today.

The report provides an overview of the banking industry’s architecture and an in-depth analysis of its asset quality, earnings, capitalisation and liability generation.

According to the report titled 2020 Banking Industry Report, in the last four years after the economic crisis, the Nigerian banking industry has written off a minimum of N1.9 trillion of impaired loans from its loan portfolio.

The firm noted that the write-offs were driven by the weak macroeconomic climate and the introduction of the international financial reporting standards 9 (IFRS 9) accounting standard in 2019.

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It was learnt that Money Deposit Banks (MDBs) and merchant banks have continued to lend, despite the loan write-offs. Total gross credit to the economy increased by N3.33 trillion from N15.56 trillion at end-May 2019 to N18.90 trillion at end-June 2020.

These credits were largely recorded in manufacturing, consumer credit, general commerce, and information and communication and agriculture, which are productive sectors of the economy.

Agusto & Co further stated that approximately 23 percent of the industry’s gross loans and advances was classified in the stage two category as at 31 December 2019, saying that it threatens the industry’s capital base and profitability.

“Agusto & Co. believes that the volume of stage two loans is a threat to the industry’s asset quality and future profitability.”

Stage two loans, primarily, comprise exposures with an increase in the associated credit risk compared to when the loan was disbursed.

The COVID-19 pandemic with its impact on businesses has elicited an increase in the volume of stage two loans.

According to the report, the ravaging COVID-19 pandemic led to the threatening of the industry’s asset quality given significant exposures to vulnerable sectors.

The CBN in a bid to counter the effects of the pandemic has disbursed over N152.9 billion to the manufacturing sector to finance 61 manufacturing projects and another N93.6 billion to the Healthcare sector, amongst many other sector-specific facilities.

The Central Bank of Nigeria (CBN) has also granted palliatives to banks in form of permitted loan restructuring to certain sectors that have been severely affected by the pandemic and it is expected to moderate the anticipated level of asset quality and deterioration in the short term.

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Wema Bank Introduces Collateral-free Loans for SMEs

MD/CEO Wema Bank Ademola Adebise

Wema Bank, one of the leading innovative banks in Nigeria, has made SME loan products that are collateral-free available to support businesses.

A statement from the bank explains that businesses in need of working capital finance could get up to N10 million without collateral to meet their short-term business needs.

Recall that the bank earlier suspended loan repayments for SMEs for three months with effect from April 1, 2020, to mitigate the crippling effects of the COVID-19 pandemic on small and medium scale businesses across the nation.

Says Ademola Adebise, Managing Director of Wema Bank: “For us, we will continue to put the health of Nigerians and the safety of our communities first, In the bank’s quest to enhance reach and accessibility of these facilities, it has made it available to both new and existing customers of the Bank (including those doing business with their personal names),”

What makes the loans unique? There is no collateral involved in this loan. This means that businesses that are relatively new or have a good credit history can still be eligible for the loan.

Even if the interest rate will be higher than a typical bank loan, Wema Bank will make sure your company can handle the payments so as not to be detrimental to your business. The loans can be paid back over 12 months.

Wema Bank says the loan offering is part of its responsibility to support the fight against the ongoing global health crisis.

Who can access the loan? The loan is available for business owners who are in segments such as trade /general commerce, schools, pharmaceuticals, hospitals, clinics, and diagnostic centres.

Wema Bank is offering up to five million naira without collateral and up to 12 months repayment period to businesses that are doing trading or general commerce while school owners can get up to 10 million naira without collateral with 12 months repayment period.

How can the loan be accessed? You can apply if your business falls within the target sectors. The loan is open to new and existing customers of the bank. To get started, simply visit the website at https://www.wemabank.com/smes/sme-loans or send an enquiry to purpleconnect@wemabank.com

BoI Lends N234b To 10,145 Businesses In 2019

 

Bank of Industry Limited  (BoI) is the oldest and largest Development Finance Institution (DFI) in Nigeria. The bank is seen as a major development financing institution and has been a flag­bearer in the provision of long-term financial support to various industries of the country.

During its 60th annual general meeting which held virtually in line with COVID-19 protocols of the Federal Government, the bank said it recorded a growth of 16.7 percent from N634.11bn in 2018 to N740.03bn in 2019.

Mr. Aliyu Dikko, Chairman of BoI, says: “We made significant progress towards improving the size of our loanable funds, leveraging our strategic partnerships in the international market and the support of the CBN.”

He adds that during the year under review, BoI disbursed N234bn to 10,145 enterprises, facilitating the creation of an estimated one million direct and indirect jobs.

The amount disbursed to the Micro, Small and Medium Enterprises segment of Nigeria in 2019 rose by 56.3 per cent to N53bn year-on-year from N33.9bn disbursed in 2018.

BoI also reviewed interest rates downwards to five percent per annum, with a three-month moratorium.

Interest income and interest expense rose by 20 per cent and 54 per cent on a year-on-year basis respectively, due to increase in loan book as well as the impact of borrowings.

The increase was recorded despite a slow start in the first quarter of that year due to the build-up to the 2019 general elections.

BoI promises to continue providing financial and non-financial support to local companies to help them improve operational efficiency to compete and take advantage of the anticipated improved demand after the African Continental Free Trade Area (AfCFTA) kicks off.

What is the Bank Of Industry? It is a parastatal under the Federal Ministry of Industry, Trade and Investment, with a primary objective to provide financial aids and support for the establishment of small scale, medium and large scale projects.

The bank targets businesses that engage in manufacturing and processing activities. Target sub-sectors include Agro-processing, Solid Minerals, Information Technology, Oil and Gas and Creative Industry.

It is owned by the Ministry of Finance Incorporated (MOFI) Nigeria (94.80%), the Central Bank of Nigeria (CBN) (5.19%) and private shareholders (0.01%).

In 2001, the BOI was reconstructed out of the merger of the Nigerian Industrial Development Bank (NIDB), Nigerian Bank for Commerce and Industry (NBCI) and the National Economic Reconstruction Fund (NERFUND).

How can you access BoI loans? BOI’s operational framework favours financial management and resourceful project selection, which is targeted at job creation and poverty alleviation in the country.

The bank does not disburse the loan to the borrower in cash but to the vendors and suppliers of the equipment that the loan application is for.

To obtain a loan successfully from the bank, there are some requirements you must meet. We will discuss this in our next topic so stay tuned.

You can apply for bank of industry loan by either visiting their office and obtain the necessary documents or you follow the steps below to apply online.

To apply online, ensure you have all the necessary requirements ready including the business plan. Head over to https://www.boi.ng/apply/.

 

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