SMEDAN Launches N500m Interest-Free Fund to Boost Small Businesses

June 29 () — The Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) has unveiled a N500 million zero-interest revolving fund aimed at expanding access to affordable financing for Micro, Small, and Medium Enterprises (MSMEs).

Director-General of the agency, Charles Odii, announced the initiative, known as the Grow Fund for Small Businesses in Nigeria, during an engagement with traders, saying the intervention was designed to tackle one of the biggest challenges confronting Nigerian entrepreneurs—limited access to affordable credit.

According to Odii, the agency’s decision followed direct consultations with market traders to better understand the realities facing small business owners.

“We visited traders at one of the markets today to engage directly with them because it is not enough to sit in offices and make policies without understanding their realities.

“Many of the challenges they raised border on financing, which is why we are launching the Grow Fund for Small Businesses in Nigeria,” he said.

Access to affordable finance remains one o,f the major constraints to the growth of Nigeria’s MSME sector, with many entrepreneurs unable to obtain conventional bank loans because of high interest rates, collateral requirements, and other stringent lending conditions.

The launch of the Grow Fund forms part of SMEDAN’s broader strategy to support small businesses, stimulate entrepreneurship, create jobs, and enhance the contribution of the MSME sector to Nigeria’s economic growth.

Odii explained that the interest-free loans would enable beneficiaries to increase their working capital, purchase equipment and business tools, and secure suitable workspaces needed to expand their operations.

He disclosed that, unlike previous intervention programmes where funds were disbursed directly to individuals, SMEDAN would channel the loans through registered business and trade associations.

“We are not giving the money to individuals directly. We are giving it to associations that understand their members and can manage the funds responsibly,” he said.

The SMEDAN boss noted that the association-led model was deliberately designed to strengthen accountability, improve loan recovery, and ensure that more entrepreneurs benefit from the revolving fund over time.

The agency said repayments from beneficiaries would be recycled to finance additional businesses, creating a sustainable funding mechanism capable of reaching thousands of MSMEs across the country.