FG’s MSME interventions will ensure small businesses thrive, says NOA

The National Orientation Agency (NOA) says the federal government’s intervention for micro, small and medium enterprises (MSMEs) is designed to address gaps in the sector and strengthen the 39.7 million small businesses driving Nigeria’s economy.

NOA described one of the interventions, the N200 billion intervention fund announced in February 2024 to support MSMEs and manufacturers, as a major step to boost productivity and job creation.

In an explainer dated October 17, the NOA said the initiative, introduced under President Bola Ahmed Tinubu’s administration, is designed to help small businesses recover from economic challenges and expand their operations.

According to the agency, Nigeria’s MSMEs fell from 41.5 million in 2017 to 39.7 million by December 2021, following a harsh business environment.

“The administration of President Tinubu conceived and deployed several initiatives to ensure that small businesses do not only survive but are also prosperous, adding value to the economy,” the report said.

In pursuit of the goal, the agency said the government earmarked N200 billion to fund different phases of the initiative, including direct support for manufacturers.

The first phase, the NOA said, was tagged the Presidential Conditional Grant Scheme (PCGS), which involved the disbursement of N50 billion to one million nano businesses across the 774 local government areas.

According to the report, each beneficiary received N50,000, with at least 1,000 participants per local government.

“The PCGS was deployed to assist at least 1,000 beneficiaries from each of the 774 local government areas with special focus on women and young people,” the document said.

Beneficiaries were not required to repay the funds, according to the agency, and the Bank of Industry (BOI) implemented the scheme, targeting small enterprises willing to register formally and employ at least one additional worker.

According to the NOA, the second phase, known as the MSME Intervention Fund, saw the release of N75 billion to support 75,000 small businesses.

The agency said each beneficiary could access up to N1 million at 9 percent interest, with no collateral required.

“This phase offered a maximum of N1 million each to beneficiaries at 9 per cent interest rate. The phase, conceived as a rescue mission, was designed to be collateral-free,” the report added.

In the third phase, NOA noted that the government’s Manufacturing Sector Fund disbursed another N75 billion to 75 manufacturing firms, each receiving N1 billion at 9 percent interest.

The agency said the Corporate Affairs Commission (CAC) and Moniepoint Microfinance Bank were directed to register at least two million manufacturing companies as part of efforts to formalise operations nationwide.

‘MSME LOAN LIMITS INCREASED TO N5M AT 9% INTEREST RATE’

In the explainer, NOA noted that the federal government has increased the maximum loan amount accessible to MSMEs to N5 million at a 9 percent interest rate.

Another intervention, according to the agency, is the N250,000 grants received by outstanding MSMEs identified at the 7th Expanded National MSME Clinics held in Akure, Ondo.

NOA said the Vice President Kashim Shettima, who announced the disbursement of the grants, said the federal government is supporting SMEs because they contribute over 45 percent to the economy and employ more than 60 million Nigerians.

The agency further recounted the allocation of N3.7 billion by BOI to rural businesses at the end of the first quarter of 2025, with expanded operations in all state capitals to improve accessibility.

‘BOI DISBURSED N1.3TRN TO MSMES IN NIGERIA’

The NOA said reports showed that the Bank of Industry (BOI) has disbursed N1.3 trillion to micro, small, and medium enterprises in Nigeria, consequently creating a huge volume of jobs and enhancing economic growth.

“In 2024 only, BOI said it disbursed N107 billion to 1.5 million MSMEs with the plan to raise the amount to N120 billion at the end of the year,” the agency said.

“The bank has the mandate to increase access to affordable financing, including offering loans at 9 percent interest rate and a three-year repayment period. Applicants can access these funds directly from BOI without intermediaries.”

For effectiveness, NOA said BOI operates in partnership with some organisations, such as the African Guarantee Fund, to increase funding for MSMEs, businesses owned by women, and green initiatives.

According to the agency, part of the initiative to support MSMEs is the tax reform bills signed by Tinubu, which offer tax exemptions to small businesses in Nigeria, aiming to support their growth and development.

The explainer further noted that the reform exempts small companies with a turnover of N100 million or less and total fixed assets not exceeding N250 million from paying profit tax, covering over 90 percent of businesses in the country.

NOA added that in May this year, the federal government launched the Derisking Fund, an initiative to enable MSMEs to access loans at relatively reduced interest rates, bearing in mind that lending rates currently stand high.