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If you also need information on the NERFUND Loans, then you’re also in the right place because we would also guide you on how to apply for the loan and other available loans in Nigeria.
NERFUND LOAN Application Guidelines
HOW CAN ONE BENEFIT FROM THE NERFUND LOAN SCHEME?
Obtaining a NERFUND loan is a serious business but simple to accomplish. Prospective applicant needs to know what it takes to be eligible for the loan in question; either a Micro or SME facility.
- The enterprise shall be wholly Nigerian-owned;
- Up to 60% of raw materials must be locally sourced;
- Plant and machinery shall be sourced preferably locally and elsewhere;
- Projects must be financially and economically viable and shall have positive impact on especially in employment creation in the locality;
- The expected project could be a start-up, expansion, rehabilitation, or diversification of the existing business;
- The beneficiaries shall contribute 30% of the cost of the proposed business.
WHAT IS THE NERFUND MICRO-CREDIT SCHEME ABOUT?
The Micro Credit, as the name implies, is a new window recently opened to carter for the active poor who are in the vast majority and who are mostly engaged in micro businesses. The introduction of the new window became necessary since conventional banks are not too keen to provide credit to this segment of the business community. The main objective of the scheme is to alleviate poverty and increase the GDP.
The target audience is comprised of fresh graduates, women’s societies, market associations, artisans and lots more who are engaged in cottage industries, basic manufacturing, food processing, etc.
HOW DOES A PROJECT QUALIFY?
To qualify, an enterprise for a NERFUND loan must be a Micro, Small or Medium scale real Production Enterprise. Request for funding shall be by way of an application in the form of a feasibility report or business plan. This shall be accompanied with a proforma invoice stating the price and source of proposed plant and machinery.
WHAT TYPE OF BUSINESS OR INDUSTRY QUALIFIES FOR A NERFUND FACILITY?
Enterprises eligible for funding shall be micro, small and medium enterprises that are engaged in manufacturing, mining, food processing, agro – allied and ancillary services such as LPG bottling, printing and publishing, etc.
DO I NEED COLLATERAL?
This depends on the size of funding required. Micro loans do not required presentation of fixed asset collateral, while SMEs do. Micro enterprises are those which total value of application is below five million naira whereas SMEs are applications above five million naira.
WHY DO I NEED A FEASIBILITY REPORT TO BORROW FROM NERFUND?
Feasibility report is a tool used in assessing the viability or otherwise of a project. It enables the project officer to ascertain the commercial and technical viability of the proposed enterprise. in question. It provides indepth analysis of the proposed project.
WHAT IS THE RATE OF INTEREST CHARGED ON NERFUND LOANS?
The rate of interest charged on NERFUND loan is determined by the source of the fund.
DO I NEED A LIMITED LIABILITY TO COMPANY TO BORROW FROM NERFUND?
It is very important that all applications for NERFUND funding are made in the name of a Limited Liability Company, though registered names and enterprises may be considered for Micro Credit.
WHO ARE THE NERFUND PARTNER INSTITUTIONS (NPI)?
NERFUND Partner Institutions (NPI) are public and private capacity building agencies and other organized groups, including state governments with whom NERFUND had executed Memoranda of Understanding (MOU) for the sake of advancing credit to the graduates of its training program in order to set up MSMEs.
What is the repayment period for NERFUND loans?
The tenor of NERFUND loan is determined by the size or category of loan granted.
Micro loans have a moratorium of three to six months and a repayment period of one to three years. SME on the other hand have a grace period of six months to one year and a repayment period of up to five years.