Lagos state partners BOI, Sterling Bank to launch single-digit, no-collateral loans for SMEs
Legit.ng journalist Ruth Okwumbu-Imafidon has over a decade of experience in business reporting across digital and mainstream media.
One of the critical problems faced by small and medium businesses in Nigeria is access to finance. As the second-largest commercial hub in Africa, Lagos state is looking to solve the problem for SMEs in the state.
Lagos State Governor, Babajide Sanwo-Olu, has unveiled a funding initiative, the Lagos State Access to Finance for SMEs through Cooperatives (LASMECO).
This will allow SMEs to access loans with zero collaterals and at single-digit interest rates.
Source: Getty Images
The governor noted that the beneficiaries for the programme would be reached through the registered cooperatives in the state.
The Memorandum of Understanding (MoU) was signed between the state government, Managing Director of BoI, Dr Olasupo Olusi, and the Sterling Bank representative.
Speaking at the unveiling at the Adeyemi Bero Auditorium, Alausa, Ikeja, Governor Sanwo-Olu disclosed that the state was partnering with the Bank of Industry (BoI) and Sterling Bank to bring the initiative to life.
He stated that under the initiative, SMEs will access up to N10 million loans at 9% interest rate per annum, for up to three years.
He urged the beneficiaries to take advantage of this low-interest, risk-mitigated loans to grow their businesses judiciously.
He said;
“This occasion, the launch of the joint initiative between the Lagos State Government, Bank of Industry, and Sterling Bank MSME Fund, is not just a formal unveiling of a financing programme. It is the unveiling of dreams, the lighting of thousands of small candles that together will illuminate the path to a more prosperous and inclusive Lagos.”
The Nation reports that the loans from this initiative will target strategic sectors especially;
The governor explained that the rationale for the project was to help young and hardworking entrepreneurs who might never scale their business because of no access to finance.
Source: Getty Images
He referenced the story of a young seamstress, Bisola, in Alimosho, whose business remained stunted for years until the Lagos State support scheme for small businesses granted her a low-interest loan in 2020. With the loan, she got more machines and hired more hands to scale her business.
He added that with proper application, these small businesses can turn around the economy of Lagos state, just like other loans that target women and youths.
Small business owners can access the loans by walking into a Sterling Bank branch within Lagos state.
In a move to boost job creation, the Lagos State Employment Trust Fund has gave out N1.17 billion in loans to small businesses.
About 91% of the beneficiaries who received the loans in 2024, have successfully repaid the loans.
The LSETF has also entered another agreement with USAID to train 10,000 Lagos residents, and connect them with jobs.
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Source: Legit.ng
