Federal Government To Start Distributing Loans To Business Owners, Manufacturers

The federal government will soon start distributing funds to small and medium-sized enterprises (SMEs) under two schemes to help them deal with the impact of the fuel subsidy removal.

Doris Uzoka-Anite, minister of industry, trade and investment, said on Sunday that the government will distribute N50,000 to small businesses across the 774 local government areas under the Presidential Conditional Grant Program.

The Ministry of Industry, Trade and Investment and Small and Medium Enterprises Development Agency of Nigeria will collaborate with state and local governments, federal legislators, banks and other stakeholders as part of the initiative.

"Eligible nano business beneficiaries should be willing to provide proof of residential/business address in their local government area, and provide relevant personal and bank account information, including Bank Verification Number for verification of identity," Uzoka-Anite said in a statement, Vanguard reported.

Under the Presidential Palliative Loan Program, SMEs across various sectors will get N75 billion and manufacturers will receive N75 billion. The beneficiaries have to repay the loan at an interest rate of 9% per annum.

"While MSMEs can access loan facilities up to N1 million with a repayment period of three years, manufacturers can access up to N1 billion to access financing for working capital with a repayment period of one year for working capital or five years for the purchase of machinery and equipment," Uzoka-Anite added.

Business owners and manufacturers can apply on the program's website.

"The facility would be accessed through their banks, and applicants would be required to meet the risk assessment criteria of their respective banks," the statement read.

The minister noted that these initiatives are a part of the federal government's commitment to promote economic development, entrepreneurship and financial empowerment in the country. She believes they will encourage entrepreneurship and job creation.

Nigeria scrapped a fuel subsidy in May, leading to price hikes in food, energy costs and transportation. The inflation accelerated to an 18-year high of 27.3% in October.

Since the removal of the fuel subsidy, petrol prices increased from N195 per liter to N600 per liter. The government also implemented a 7.5% VAT (Value Added Tax) on diesel.

Before Tinubu became president, the country was going through a cash crisis as a new currency redesign policy mopped up over 70% of cash in Nigeria, causing an estimated loss of N20 trillion.