Are you among all those looking for a way How to Get a Loan From Microfinance Banks in Nigeria, if yes then follow the guide here.
Numerous small and medium-sized enterprises were underrepresented in the banking sector prior to the advent of microfinance organizations in Nigeria. Their business and means of subsistence have suffered as a result of their inability to easily obtain capital. Nonetheless, loans can be obtained from Nigerian microfinance institutions.
With a starting capital of N220 billion, the Central Bank of Nigeria established a microfinance development fund in a bid to meet the funding needs of SMEs. The Central Bank of Nigeria will oversee the fund, which will be managed by accredited microfinance institutions.
What Is A Microfinance Bank?
An organization that holds a valid license from the CBN to conduct the business of offering microfinance and other financial services is known as a Microfinance Bank (MFB).
Loans, deposits, cash transfers, and any other financial products aimed at low-income clients are all considered microfinance services; these services are provided by banks such as Nirsal, among others.
In Nigeria, there are more than one thousand microfinance banks (MFBs), comprising unit, state, and national MFBs. MFBs as a group have a substantially smaller total lending portfolio than other banks—up to N53 billion. All MFBs are required by the Central Bank of Nigeria (CBN) to lend to microenterprises for at least 80% of their total loan portfolio.
Basic application requirement
Applicant must Have an existing Business: Our goal is to support you grow your existing business. Hence, it is a primary requirement for our SME loan applicant to have an existing business with proof of ownership.
Have an active Account: We would require your commercial bank account details. When your loan is approved, this account will be credited with the requested loan amount.
Be of Age: You should be 18 years and above to apply for this loan.
Have a valid ID: We only need you to upload any ONE of the valid means of identification as listed below;
a. International Passport
b. National ID
c. Driver’s License
d. Voters Card.
Please Note: The expected maximum image size to be uploaded is 500kb
Have an existing Business: Our goal is to support you grow your existing business. Hence, it is a primary requirement for our SME loan applicant to have an existing business with proof of
5 Steps To Getting A Loan from Microfinance Banks in Nigeria
In Nigeria, microfinance institutions are essential to the growth of small-scale enterprises, agriculture, and the fight against poverty.
Most microfinance banks in Nigeria require the following steps in order to approve a loan:
1.) Have An Honest Loan Project or Plan
Ensure you have a plan and a business plan to back up your proposal before approaching any MFB. This raises your chances of receiving a positive answer from the microfinance company. Remember that the only reason these microfinance organizations were founded was to boost the economy. Consequently, they only approve loans that are classified as SMEs.
The majority of microfinance banks provide loans for a variety of uses, including company financing, asset acquisition, agriculture, education, and salary-earning loans.
2.) Evidence of Your Legal Entity
You may be able to obtain the money you require from a microfinance bank by providing the lenders with documentation of your business entity or plan. If you are a trader, for instance, the paperwork for your business registration may need to include evidence of business ownership. Additionally, bank statements or transaction receipts attesting to your business’s operation may be required.
3.) Have An Account with The Bank
The next step is to open an account with the microfinance bank after making sure all the paperwork is correct. The first step in applying for a loan at a microfinance bank is to open an account. This is done to demonstrate commitment to the bank and to collect data.
4.) The Bank Account Should Be Active
Before you apply for a loan, some microfinance banks will want you to keep an account with them for a certain amount of time. But it’s not a standard procedure. It takes more than just opening a bank account to be eligible to apply for a loan; the account needs to be active, which entails regular deposits and withdrawals of funds.
5.) Provide A Collateral
In a microfinance bank, collateral may also be required when applying for a secured loan. It might not, however, apply to individual and small-business loans for petty traders. A few microfinance institutions don’t require collateral. However, it will be required for business loans for things like buying assets, farming, and other applications requiring a larger sum of money.
How to Apply Online
Steps to begin Trader Moni online application:
To apply for the LAPO Microfinance Bank “SME Loan”, simply use the steps below:
- Visit the website, https://www.lapo-nigeria.org/loans/sme
Conclusion
When selecting a microfinance bank, be cautious. A number of these banks frequently handle clients in an unethical manner and are not authorized providers of financial services. This poses the question of whether SMEs actually require microfinance banks.
To obtain the greatest offers, ensure that you fully understand the terms and conditions and evaluate interest rates offered by various microfinance institutions.