Loans Archives - SME Finance

3 Tips For Managing Your Small Business Loan

Congratulations, your loan application has finally been approved and you got the loan. In fact, the funds have already been disbursed to the designated account, so what next?

What steps would you take to ensure that your business gets the most value out of this loan and ensure that you don’t default? To help you answer these questions and make the most use of your loan I have outlined 3 tips that would help you manage your business loan effectively.

Read More: SMEs Vital To African Agriculture – African Development Bank

  1. Create A Loan Budget And Stick to It – Before you start spending that loan the first thing you should do is prepare a simple budget for the loan. Outline the expenses you want to use the loan for and how you can repay the loan. To help make this process easily try out the funds from the loan in a separate account from your business. After you’ve prepared your loan budget ensure that you stick to it. You may be tempted to use some of the loans for some urgent expenses or anything else other than their intended purpose, don’t.
  2. Avoid Taking New Loans – Sometimes, after you have taken a loan and it seems insufficient or you are unable to pay it off for whatever reason don’t try taking another loan to finance the repayment. Apart from the additional costs, you would likely incur, you are simply digging a debt grave for your business and the more you borrow to pay yet another debt the deeper it goes. If you find yourself running into trouble with repayments, you should be cutting back costs or looking for ways to increase sales.
  3. Prioritize Loan Repayment– As much as you’re focused on investing the loan wisely, plan for its repayment. You can automate it for ease of payment. Because apart from the late fees, a poor loan repayment record would have a bad effect on your business credit score and that may make it more difficult for you to get more loans next time you ask for it. You want to avoid that, so make your loan repayment a priority.

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Access Bank Launches Portal For ‘Cash Flow’ Loans

Access Bank Plc has launched ”Cash Flow Loans by Access”, a digital lending portal to enable business owners obtain loans from the comfort of their homes and offices. This service, which is available to Small Business Owners who have established sufficient cash flow records with Access Bank, seeks to advance credit to small and medium enterprises to grow and expand their operations. Victor Etuokwu, the bank’s Executive Director, Retail Banking, reiterates the bank’s commitment to positively impact SMEs, saying: “To deliver on our promise to continually give our customers ‘more’, we have developed this efficient digital lending platform which will make loan applications more convenient with flexible collateral, favourable interest rates, application tracking, robust customer service and much more.” Says Etuokwu: “We have been focused on providing solutions targeted at boosting the economy because we believe it is our responsibility to contribute to the stimulation of economic growth. With the launch of “Cash Flow Loans by Access”, we are renewing our commitment to providing the much needed financial support to SMEs.” Etuokwu adds: “In a period like this, when we need to be more present and relevant in the lives of our customers than ever, we have risen to the challenge to ensure business owners have easy access to funds to sustain and expand their businesses while keeping safe.”

You Don’t Need Guarantor For Covid-19 Loans, Says CBN

The Central Bank of Nigeria (CBN) says that households and SMEs applying for the N50 billion COVID-19 Targeted Credit Facility would not be required to provide guarantors.

A Central Bank of Nigeria twitter message (@cenbank) on June 8, 2020 says: ”CBN waives the requirement for the provision of guarantors by Households and SMEs applying for its N50bn COVID-19 Targeted Credit Facility.”

Following this development, CBN says: “All successful Household and SME applicants who have submitted their account details for the CBN N50bn COVID-19 Targeted Credit Facility should expect their accounts to be credited within 48 hours of such submission, otherwise they should call 09010026900.”

The CBN N50 billion Covid-19 Targeted Credit Facility aims to provide financial relief to households and small businesses negatively affected by the Covid-19 pandemic. Eligible small and medium enterprises can receive up to N25 million while qualified households can access a maximum of N3 million each.

IFC, Union Bank Support SMEs And Women-Owned Businesses With $25m

The International Finance Corporation (IFC), a member of the World Bank Group, is investing $25m local-currency investment in a risk-sharing facility to expand Union Bank Plc’s lending to small and medium enterprises (SMEs) in Nigeria.

The facility will cover 50% of the risk of Union Bank’s loans to entrepreneurs to help grow their businesses and create jobs.

Union Bank plans to offer more products and services to women-owned businesses with the support of IFC, especially in conflict-affected regions like the North and Delta where entrepreneurs face particularly difficult challenges of accessing finance, and more than half the population is excluded from the financial system.

Union Bank CEO, Emeka Emuwa says: “Union Bank continues to develop sustainable products and services that promote enterprise and address poverty and financial inclusion. This is in line with our commitment to support the communities within which we operate. The IFC facility is a welcome development which will further deepen our efforts to support Nigerian SMEs and women.”

Emeka Emuwa, Union Bank GMD

Eme Essien Lore, IFC’s Country Manager for Nigeria, adds:

“IFC’s risk-sharing facility will help Union Bank increase its focus on Nigeria’s underserved areas, positioning it as one of the leading banks that provides customized services to SMEs that are driving job creation and growth across the country.”

Although small businesses provide over 80 percent of Nigeria’s jobs, a recent World Bank survey found that only 15 percent of SMEs in the country reported having a bank loan or line of credit. It also found that more than half of the women-managed firms surveyed named access to finance as a major obstacle to growth.

International Finance Corporation (Seedarabia)

The new facility is part of IFC’s Small Loan Guarantee Programme  (SLGP), which is easing local-currency lending to SMEs in frontier markets. SLGP is backed by the International Development Association’s (IDA) Private Sector Window, which is providing the first-loss guarantee, allowing IFC to scale up its support to underserved and unbanked SMEs.

SMEs In The Health Sector To Receive Funding From Polaris Bank

Polaris Bank has introduced a new product called Polaris Health Sector Loan bundle as part of its measures to boost growth of SMEs in the Health Sector

The product is designed to meet the funding needs of healthcare service providers in the country.

The Group Head, Products and Market Development of Polaris Bank, Mrs. Adebimpe Ihekuna spoke on the benefits oof the new products. She said “Polaris Bank is passionate about the health sector in Nigeria and is willing to support the private sector to drive the most desired growth needed for its transformation.”

Mrs. Ihekuna threw more light on the programme “ the product is targeted at meeting the funding needs of SMEs in specific health sub-sectors like: Hospitals (including Dental and Optometry clinics), pharmacies and medical laboratories / diagnostic centers ”

She added that “The Polaris Health Sector Loan product will deliver so much benefits to SMEs in the specified sectors. This will include getting delivering tailor-made funding for their business, payment solutions for collections of fees, financial advisory services, capacity building programs and dedicated relationship management, to mention  few ”

The Polaris Health Sector Loan is available as overdraft or term loan with extended tenors, depending on the unique funding needs which include working capital requirement for stock/consumable purchases, term loan for rent, renovation, remodeling or expansion, acquisition of operational vehicles, generators, air conditioners and refrigerators for storage. Existing and new customers looking to grow their businesses in this sector can access this loan product.

Seven Online Lending Platforms That Give Quick Loans To SMEs

Online Lending Platforms

Over time, small businesses have expressed frustrations in their inability to secure extra funding or capital to start, run and grow the business. After all options have been exhausted, it now seems the only logical means is to get a business loan. But the difficulty in securing these loans have left many business owners hopeless as the process can be viewed as exhausting, complicated and frustrating.

With the emergence of many players in the FINTECH industry, there are some online lending platforms that give quick loans to small business owners with little requirements and less effort.

Below are nine online lending platforms that give quick loans:

1. Aella Credit

Aella Credit is a platform that focuses mainly on employee lending and empowerment. It uses credit scoring algorithms to determine the credit worthiness of loan applicants, which was built after the team gathered over five years of market data and analysis. The algorithm was built to process eligibility of applicants by considering social and demographic factors as well as their debt to income ratio.

  • Loan amount: Up to N720,000
  • Interest: 20-27% for out of network loans 1-14% for in networks loans 

2. Carbon-Carbon for Business

Carbon (formerly Paylater) offers short term loans to both individuals and small businesses to help cover urgent cash needs.

Small businesses and individuals can access up to N500,000 loan without collateral. Funds are received 1-3 business days after your loan application has been approved. To access higher credits, repayments should be made at the stipulated time.

  • Loan amount: Up to N20 million
  • Interest: Varies 

3. Grofin

GroFin focuses on Small and Medium Enterprise financing and business loans across Africa and the Middle East.

As a small business you can access business loans between $100,000 and $1.5m. If you have investible numbers and you looking to expand your business, then GroFin is your best short. you can submit your online application here, If you think your business ticks the required checklist

4. Kiakia

KiaKia is a digital money lending platform that gives access to personal and business loans. This platform allow borrowers and lenders to negotiate interest through intuitive conversations. Kiakia uses machine learning and digital forensics for its credit scoring and risk assessment algorithm. This allows the platform to provide direct and peered personal and business loans to millions of individuals and SMEs without credit information.

  • Loan amount: N50,000+
  • Interest rate: 3.5%. 

5. Lydia

Lidya is a leading online lending platform that provides small and medium businesses access to finance. Businesses can access between $500 and $15,000 in working capital.

Lidya utilizes a technology and algorithms that assesses the risk before granting the loans, it allows them to offer financial products to these customers at a low cost.

  • Loan amount: N150,000+
  • Interest rate of 3.5%.

6. Quickcheck

QuickCheck is a modern lending platform that allows both individuals and small businesses access loans. QuickCheck uses mobile technology to enable individuals and small businesses gain access to financial credit.

According to the platform, users can access quick and hassle free loans of up to 30,000 Naira without any collateral for a duration of either 15 or 30 days.

  • Loan Amount: N1,500 – N500,000
  • Loan Interest: 5% per month 

7. One-Fi

OneFi is a credit facility company that offers short-term consumer loans to credit-worthy individuals with limited access to finance. It was formerly known as One credit

One-Fi loan repayment cycle is typically between 3 – 12 months, with loan amounts ranging from N40,000 – N2 million. You can apply here.

DBN Lends N100bn To 95,000 Enterprises

According to the Development Bank Of Nigeria (DBN), it has disbursed N100 billion loan to over 95,000 entrepreneurs this year accelerate Micro, Small and Medium Scale Enterprises (MSMEs) growth in the country.

Tony Okpanachi, The Managing Director Development Bank Of Nigeria, disclosed this on Tuesday at the maiden summit of the bank held at the Government House

The summit was themed: “A New Dawn for MSMEs and Business Development in Nigeria,”

It was aimed at enhancing access to credit, financial inclusion and develop entrepreneurial skills of businesses.

“The loans were disbursed to the beneficiaries from January to date, through financial institutions in the 36 states.” Mr Okpanachi said

He further stated that 300 MSMEs received loans worth N200 million under the pilot loan scheme when it commenced lending operation in November 2017.

He also said over 35,000 businesses benefited from a N30 billion facility in 2018.

“I am pleased to report that 72 percent of loans are to women owned businesses.

“In the current year; we have disbursed over N100 billion to over 95,000 MSMEs cutting across various sectors of the economy.

He also added that “70 percent of loans were to women and 51 percent for youth-owned businesses,”

Mr Okpanachi said the bank was in collaboration with National Chambers of Commerce, Industry, Mine and Agriculture (NACCIMA), Small and Medium Enterprise Development Agency (SMEDAN), universities and other financial institutions.

He stated that MSMEs played a crucial role in economic growth, poverty reduction, employment creation, and wealth creation.

Mr Okpanachi said statistics by SMEDAN and National Bureau of Statistics (NBS) showed that 41.5 million MSMEs contributed to 50 percent of the national GDP.

“Accordingly, 90.5 percent of the enterprises do not have access to credit facilities; 83.5 percent lack assistance in power and water supply, and 73.1 percent tax reduction,” he said.

He stated that the lack of access to finance was a major challenge for the MSMEs despite its contributions to sustainable social and economic development.

Airtel In Partnership With Ecobank To Offer Loan To Their Customers

Telecommunication Company Airtel Africa and Ecobank have reached an agreement to offer loans to Airtel customers. This partnership is not the first of its kind as Diamond Bank (now Access Bank) and MTN Nigeria are also into partnership.

The partnership will see Ecobank Transnational Incorporation (ETI) financing Airtel’s mobile money service called Airtel Money after the Central Bank of Nigeria (CBN) approved the operation of the telecoms firm as a mobile money operator

The aim of the partnership is to create more access to funds for those in need of capital. Aside access to funds, it will also enable customers perform other mobile transactions between them, including product savings, international and domestic transfers.

The partnership will also see Ecobank account holders make bulk disbursements, such as payroll payments, directly into Airtel Money customer wallets. Also, virtual, physical debit and pre-paid cards to Airtel Money customers by Ecobank.

The Chief Executive Officer of Airtel Africa, Raghunath Mandava, spoke on the partnership. He said, “This partnership is a further demonstration of Airtel Africa’s commitment to provide affordable, simple and innovative solutions for our customers across Africa. We will continue to offer locally relevant M-Commerce solutions with partners like Ecobank in order to enhance the daily lives of our customers.”

Ade Ayeyemi who is the CEO of the bank also spoke, he said, “We believe that financial inclusion can ultimately contribute to economic development, collaborating with major telecommunications providers in Africa is therefore a key strategic driver towards closing the gap between the banked and the unbanked.

“Hence, this partnership with Airtel Africa which makes Ecobank financial services available to any Airtel line registered on Airtel Money. In our markets where regulatory approvals are in place. This potential exensive reach will further provide convenience to customers, intra-country and particularly for cross-border transactions and remittances across Africa.” he concluded.

FG Calls On States To Access N1.5bn Agric Loan

The Federal Government has called on all states to embrace the Accelerated Agricultural Development Scheme and take advantage of the opportunity to access N1.5bn Agric loan.

A meeting of the Joint Planning Board and National Council on Development Planning was held on Wednesday in Asaba. At the opening ceremony, The Permanent Secretary of the Ministry of Budget and National Planning, Mr Ernest Umakhihe spoke. He said the scheme was aimed at diversifying the economies of the states, focusing on agriculture.

He said: “the country’s gross domestic product report has constantly indicated that the oil and gas sector dominates other sectors in terms of contribution to the National GDP”.

“The Federal Government has done a lot regarding the Anchor Borrowers’ Scheme for states, which has led to Nigeria’s self- sufficiency in rice and other crops”.

Furthermore, he said, “Nigeria has come to the point of ‘no going back’ in her economic transformation policy. I implore you to support and replicate the economic policies of the Federal Government in your respective states.”

Umakhihe commended Delta State Governor, Ifeanyi Okowa, for the introduction of empowerment programmes into the state.

These are Youth Agricultural Entrepreneurs programmes, Production and Processing Support Programme and Public-Private Community Partnership for Large Scale Commercial Farming and Agro-processing.

Sterling Bank To Disburse N10bn Loan To Farmers

Sterling Bank Managing Director and Chief Executive of Sterling Bank Plc, Mr. Abubakar Suleiman, disclosed in a recent interview the bank’s plans to disburse loans worth N10bn to farmers.

The bank recently launched a platform called SABEX in partnership with AFEX Commodities Exchange and Binkabi – a digital platform.

He said the initiative will allow farmers, particularly small and medium-scale enterprises to gain access to adequate financing for their business and be able to sell their products and commodities after harvest.

“Furthermore”, he said, “this will also help farmers to harvest their crops and move their farm produce to a more conducive storage facility without incurring much loss. With this, they will be able to sell and earn value”.

Mr. Abubakar Suleiman spoke on how farmers can qualify to get on the platform and access loans. He said, to get on the platform, farmers will need to link their bank accounts with Sterling Bank and other partner banks. They will be required to provide additional information about themselves and their businesses before they can start trading. “We are only laying emphasis on commodity trading, either as a company or an individual. There are no special requirements, registration is free”.

He said the biggest motivation behind this initiative was the huge post-harvest that farmers suffer in the country. Which is as a result of poor storage facilities for their commodities and farm produce.

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