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SME Loans in Nigeria 2024

By Oluchukwu Ikemefuna

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SME is an acronym for Small and Medium Enterprise, so you know what we mean when we mention an SME loan. Oftentimes, businesses or individuals at the initial stage of initiating a business idea are faced with a common challenge—funding.

We all know what that means; the essence of capital can never be overstated in any business endeavour. It is the very fuel that sets business ideas in motion. Consequently, entrepreneurs often seek out ways and means to bridge the gap between their financial incapacity and bringing their business ideas to life.

To overcome the financial obstacles that challenge business ideas, entrepreneurs usually seek funding through various means. One such means includes seeking a loan. However, the complexities of the traditional loan system usually dissuade some prospective small business owners.

Imagine having to pay exorbitant interest rates on a business whose prosperity hangs in the balance of ‘everything being equal,’ and whose sustainability is not guaranteed. Simply put, the future of the business hangs in the balance of uncertain factors. How about filling out excessive paperwork? Or the sometimes unrealistic requirements, collaterals, and other financial intricacies?

All the stated challenges are formidable obstacles that prevent small businesses from harnessing the power of their ideas. However, all hope is not lost; there is a solution in the midst of the seemingly impossible.

So, how can this issue of little or no capital get resolved? That is why we have the SME loan. In this article, we will discuss key things, such as the essence of SME loans and the available SME loans in Nigeria. Keep up as we delve into the topic in detail.

What are SME Loans?

Entrepreneurs need capital—it is the lifeblood of any business idea. SME loans are specialized short-term loans designed for small and medium scale enterprises, as the name implies. In this kind of loan system, the traditional intricacies that accompany conventional loan systems are eradicated completely. The focus is on giving small and medium scale businesses some leverage to actualize the businesses they envision.

In this loan option, limited paperwork is required, as the aim is to empower investment and support entrepreneurial spirit in the country. Also, entrepreneurs don’t have to go through the process of rigorously convincing investors about the prospects of their businesses; SME loans take away all of those hurdles. The idea is to encourage entrepreneurial spirit for socio-economic development in the country.

There is no doubt that when these businesses succeed, they contribute to the GDP of the country, which in turn fosters economic growth in the country. Not only that, it bolsters the employment rate in the country, which ultimately reflects on the socio-economic affairs of the country.

From a social perspective, employment provides individuals with a sense of purpose, identity, and belonging. It affects their social status, relationships, and overall well-being. Employment can contribute to a person’s sense of dignity and self-worth, as well as their integration into society.

Economically, employment is a key driver of productivity, income generation, and economic growth. It affects factors such as GDP, tax revenues, and consumer spending. Additionally, the availability and quality of employment opportunities influence poverty levels, income inequality, and overall economic development within a society. That is why the SME loan is a tool implemented to bring about this kind of growth in the country.

Also Read: 8 Illegal Digital Loan Companies in Nigeria You Should Avoid 2024

SME Loans Interest Rates

Here is the interesting part—the interest rates of SME loans. Every entrepreneur goes into business with a sense of hope and calculated risks. Every entrepreneur knows that getting a ROI (Return on Investment) is not 100 percent guaranteed. The prospects of the business hang in the balance of uncertain factors. These factors can potentially make or break the business. That is why entrepreneurs need a loan system that offers a reasonable interest rate.

Moreover, new businesses face several challenges that can affect how they make a profit. Some of the challenges are highlighted below.

Challenges Small Enterprises Face

Below are some of the challenges faced by small and medium enterprises:

  1. Problems with Cash Flow: Most lists of business woes include financial difficulties in one form or another. For small firms, the main concerns are unanticipated expenses, unpaid invoices that can’t wait to be paid, and clients that delay payments.
  2. How fatigue affects owners of small businesses: Being a small business owner makes it easy to want to do it all. In fact, working long hours just makes the strain worse. One of the most frequently disregarded small company obstacles is fatigue. This can make you clumsy, forgetful, and irritable, as well as less attentive to customers and prone to mistakes.
  3. Attracting and Maintaining Profitable Clientele: An old business proverb states that you need clients who have problems that only you can address. It is your responsibility to find your USP and make it apparent to potential clients.
  4. Encouraging Workers: Because there are typically fewer employees in small organizations, apathy has a greater influence.
  5. Excessively High Overheads: One of the main obstacles facing small businesses is overhead, which has destroyed many otherwise excellent businesses.
  6. Remaining Up to Date: Small business owners sometimes get so busy that they neglect to stay up to date on developments in their industry.

With all of the listed challenges, it is obvious why small and medium enterprises need a loan that offers a minimum interest rate. An SME loan is just the kind of loan that is needed. It offers a comparatively low interest rate to borrowers. This ensures business owners have the time to focus on other important things, rather than on how to pay back an exorbitant loan.

Also read: Top 10 Online Banking Apps in Nigeria 2024

Types of SME Loans

Here is a list of SME loans:

  1. Term Loans
  2. Working Capital Loans
  3. Equipment Financing
  4. Lines of Credit

Term Loans: Term loans are traditional loans that have fixed term, repayment schedule, interest rates, etc. They are commonly used for long-term investments like property purchases or for widening business operations.

Working Capital Loans: These are loans that cover the everyday operational expenses of SMEs. They are used in sorting out expenses like: rent, payroll, inventory, etc.

Equipment Financing: As the name implies, these are loans that are used to cover equipment expenses. The equipment purchased from the loan serves as collateral.

Lines of Credit: A line of credit is a flexible loan from a financial institution that consists of a defined amount of money that you can access as needed.

SME Loans in Nigeria

In this section, you will find a list of SME loans in Nigeria. We will highlight several financial institution in Nigeria that offer SME loans. Below are the list

Financial institutions in Nigeria that Offer SME Loans

1. Alat by Wema Bank

Alat is one of the financial institution that offer SME loans in Nigeria. On their page, you will find this:

We know running a small or medium scale business has its own challenges and we understand your desire to expand your business, buy new tools and meet your crucial business needs.

For these reasons, we have a range of suitable small business loans or financing or SME finance options to help your business grow.

Requirements for Alat SME Loans

According to the information provided on the Alat page, these are the requiremnts for obtaining an SME loan:

  • You must have an ALAT account
  • Your business must be registered with CAC
  • You business must have a bank account with ALAT or WEMA used to receive payments and make payments.
How to get Alat SME Loans in Nigeria?
  • Login to ALAT or sign up if you have not
  • From the icons on the menu, click on loans
  • Choose “SME Loan” from the loan options
  • Fill the necessary details about your SME and proceed to the next level

To find out more, click on this link.

2. Stanbic IBTC SME Loans

Stanbic IBTC is also offering SME loans in Nigeria.


  • Availability of short-term working capital to customers
  • Bridging short term financial needs
  • Business growth for customers

How to Get the Stanbic IBTC SME Loan

  • Applicant’s formal letter of request for loan
  • Satisfactory credit  checks from 2 credit bureaus
  • Banking history of at least six months with Stanbic IBTC Bank or 12 months with other Banks
  • Registered enterprise or limited company (Incorporation) Documents to be provided
  • Tax Identification Number (TIN)
  • Upon loan approval, duly accepted Offer Letter.

What the Stanbic IBTC SME Loan Costs

  • OD and Advance: 36% with free insurance
  • Short Term Loan: 36% with free insurance
  • Management Fee: 1%

There is no concession on the pricing

The information provided on this page is based on the information obtained from the Stanbic IBTC official page. For more information, click here.

3. UBA SME Loan

Below is an excerpt from the UBA page:

Working Capital Loan

The UBA Working Capital loan offers up to ₦50 Million to help business owners meet their cash flow needs and expand their business. A flexible collateral cover will be required depending on the loan amount and the nature of the customer’s business. It is open to customers with verifiable credit net worth, whose cash flow patterns meet the requirement for lending. 


  • – Customers get up to  ₦NGN50 Million, payable over 12 months to expand their business and meet their cash flow demands
  • – Women-owned businesses get special interest rate.
  • – Customers can get the facility as an overdraft or a term loan.


  • – The business must have been registered for up to 1 year.
  • – The business must have a banking relationship with UBA for a minimum period of 3 months.
  • – To learn more about our requirements, kindly talk to the SME team at any UBA branch closest to you.

How to apply

Kindly ask to speak with the SME Team at the UBA branch closest to you. 

For more information, click here.

Also read: Access Bank Transfer Codes For Money Transfers and Bill Payments 2024

4. Fidelity Bank SME Loan

The Fidelity a list of SME loans in Nigeria. These include:

  • Commercial Support Short Term Loan
  • Commercial Support Overdraft
  • Traders Support Facility (TSF)

Commercial Support Short Term Loan

This is a working capital loan for business owners to meet urgent cash needed for their business expansion.

This loan is open to Micro, Small and Medium-scale businesses (MSMEs) with stable cash flow and operating in Lagos, Abuja, Enugu, Imo, Abia, Edo, Kano, Bayelsa, Kwara, Rivers and Niger States.


  • Customers can get up to ₦20 Million and repayable over 6 months to expand their business and meet their cash flow demands
  • Women-owned businesses get a special discount interest rate on this loan


  • Applicant’s formal letter of request for the loan
  • Business should have at least 3-months banking relationship with Fidelity Bank or other banks
  • Applying businesses must be registered

Commercial Support Overdraft

This overdraft enables business owners to finance their short-term cash flow and working capital needs to expand their business.


  • Customers can get up to ₦10 Million payable over 3months to expand their business and meet their cash flow demands
  • Women-owned businesses get a special discount interest rate on this loan


  • Applicant’s formal letter of request for the loan
  • Business should have at least 3-months banking relationship with Fidelity Bank or other banks
  • Applying businesses must be registered

Traders Support Facility (TSF)

This is a short-term loan designed for small and medium-scale businesses operating the fast-moving consumer goods sector in well-organized clusters around the FESTAC area of Lagos State.


  • The loan is a working capital finance
  • This loan is available as an overdraft or term loan
  • Eligible businesses can access term loans and overdrafts of up to N20m and N40m respectively, for up to 12 months


  • Only identified small and medium-scale businesses around FESTAC area of Lagos State are eligible for this loan. These clusters include Balogun Business Association (BBA), Auto Spare Parts & Machinery Dealers Association (ASPAMDA), Alaba, Tyre Market, APT Jewelries Market, and Orile/Odunade Building and Plumbing Materials Market
  • Access to loans of up to N3m without any collateral
  • Loans above N3m will require shop documents or legal mortgage of property outside the market

The information in this section is based on the information extracted from the Fidelity page. For more info, click here.

5. First Bank SME Loan

Here is an excerpt from the First Bank official page:

As a leading financial institution, FirstBank is committed to harnessing the huge opportunities available in the SME sector and empowering them for growth and sustainability with the range of bespoke financial solutions made for them as shown below. 

SME Product Financing

Loan facilities to support the growth of SME businesses with required funds

  • Commercial Mortgage
  • Operational Vehicle Finance
  • Petroleum Dealership Finance
  • Import Finance
  • Oil and Gas Contract Finance
  • Cement Distributorship Finance
  • Invoice Discounting Finance
  • Telecommunications Distributorship Finance
  • FMCG Key Distributorship Finance
  • Secured Term Loans
  • FirstGem Funds

To read up about all of those options, check out the First Bank official page by clicking here.

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Oluwajuwon Oladiti
Oluwajuwon Oladiti

Oladiti Oluwajuwon is an ardent reader and a voracious writer who is passionate about informing the public with first-hand, authentic information. His writing expertise has spanned over 5+ years, an odyssey that began in 2018. Over the years, he has crafted pieces across multiple domains, including religion, education, politics, and tech. There are two principles at the core of his writing: information must be genuine and accurate, and there is nothing erudite about speaking in terms people don't understand. While maintaining technicality, messages must be passed in a way that resonates with the readers.

Oluwajuwon is also a software engineer who specializes in backend development with Python, and he has an unwavering passion for music, pop genre especially.

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