SMEDAN begins disbursement of N5bn loans to SMEs

The Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) has announced that small and medium-sized enterprises (SMEs) have begun tapping into the N5 billion loan provided at a single-digit interest rate from Sterling Bank. Despite this positive development, some SMEs are struggling to meet the bank’s stringent eligibility criteria.

To address these issues, SMEDAN is offering assistance to the affected businesses. Charles Odii, the director-general of SMEDAN, revealed on Tuesday that he met with Sterling Bank’s managing director, Abubakar Suleiman, on Monday to discuss the challenges faced by applicants.

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Odii noted that the bank cited problems with formalisation and other eligibility-related issues as the main hurdles for SMEs. “I had a meeting yesterday with Sterling Bank’s MD/CEO and other officials to discuss the N5 billion SMEDAN-Sterling loan program aimed at enhancing financial access for small businesses through a single-digit interest rate,” Odii shared on X.

While some loans have already been disbursed, Odii acknowledged the feedback regarding the difficulties encountered in the application process. “The bank highlighted issues with formalisation and other factors that have impeded some businesses from qualifying for the loan,” he said.

To tackle these challenges, SMEDAN and Sterling Bank have devised an action plan that includes ongoing updates to the digital application platform for improved user experience, support for applicants who failed to meet the eligibility criteria, and clear communication of the application process both online and at bank branches.

“Our mutual goal is to support small businesses and ensure the loan program is fully utilized to foster business growth,” Odii emphasized.

Additionally, SMEDAN plans to follow up with successful applicants to monitor their progress and provide personalized support to maximize the benefits of the loan.

The agreement between SMEDAN and Sterling Bank to provide this N5 billion loan facility was signed on November 22, aiming to bolster small businesses nationwide.