The Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) has revealed that only N250 million of the N5 billion loan fund provided by Sterling Bank for small businesses has been disbursed so far across Nigeria’s 36 states and the Federal Capital Territory. This was disclosed during the signing of a memorandum of understanding (MoU) between SMEDAN and Sterling Bank.
Contrary to popular assumptions, the fund is not a grant but a loan facility to be accessed and repaid by small businesses. However, the agency says a majority of SMEs are unable to tap into the funds due to capacity limitations and poor recordkeeping.
SMEDAN Director General said the agency did not anticipate such a slow disbursement rate. While the funds are available, they remain largely untouched because many businesses are not adequately structured or prepared to access them. He noted that most SMEs do not keep business records or possess the documentation required for loan applications.
To address this, SMEDAN is intensifying efforts through its business clinics to train and license entrepreneurs to improve their capacity. In the first quarter of the year, 12,000 business owners were trained through the agency’s partners, with plans underway to train more.
Katsina State stood out as a notable success story. The state, under the leadership of its governor, a former SMEDAN Director General recorded N200 million in disbursed loans, with 204 businesses accessing the funds. This alone accounts for 80% of the total N250 million disbursed nationwide.
To further enhance access, SMEDAN has signed additional MoUs with state governments and the Bank of Industry. A new agreement with Katsina State includes a N1 billion loan provision specifically for SMEs in the region.
The agency has also established an SME databank to formally register small businesses, track their progress, and link them with financial opportunities. The initiative is expected to streamline future loan access by making SMEs more visible and assessable to financiers.
Despite the current bottlenecks, SMEDAN says it remains committed to supporting small businesses and unlocking the full potential of the Sterling Bank loan fund.
