The Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) has launched a ₦500 million zero-interest Grow Fund to provide affordable financing for Micro, Small and Medium Enterprises (MSMEs).
The Development Finance Institution (DFI) says the move is aimed at easing one of the biggest challenges confronting small businesses across the country.
Charles Odii, the Director-General of SMEDAN announced the initiative on Friday in Abuja during an engagement with the Commerce and Industry Correspondents Association of Nigeria (CICAN), held as part of activities marking the 2026 World MSME Day.
Odii said the revolving loan scheme would be administered through cooperatives, trade unions, business membership organisations and recognised associations, rather than directly to individual entrepreneurs.
According to him, the association-based model is expected to improve accountability, strengthen loan recovery and ensure that the funds reach genuine business owners.
“We visited traders at one of the markets today because it is not enough to sit in offices and formulate policies without understanding their realities,” Odii said.
“Many of the challenges they raised border on financing, which is why we are launching the Grow Fund for Small Businesses in Nigeria.”
He explained that beneficiaries would be able to access the interest-free financing to expand working capital, procure workspaces and acquire equipment needed to grow their businesses.
“We are not giving the money to individuals directly. We are giving it to associations that understand their members and can manage the funds responsibly,” he added.
Odii said repayment arrangements would be agreed upon with each participating association, noting that the flexible model would allow the revolving fund to support more entrepreneurs over time.
He disclosed that the initial ₦500 million fund would be expanded through partnerships with state governments, development partners and other institutions willing to provide matching funds.
The SMEDAN boss also announced that the agency is reviewing the draft National MSME Policy ahead of its submission to President Bola Tinubu for approval.
He said another round of stakeholder consultations would be held before the policy is unveiled in November.
Among the proposed reforms are the introduction of single-digit interest loans for MSMEs, reservation of 30 per cent of government procurement opportunities for small businesses and the removal of age limits from government intervention programmes.
Odii added that SMEDAN would engage relevant regulatory agencies to address issues affecting small businesses, including concerns over advertising registration requirements.
He also urged state governments to partner with the agency in establishing more enterprise development centres to better prepare Nigerian MSMEs to compete under the African Continental Free Trade Area (AfCFTA).
Speaking at the event, the Senior Special Assistant to the President on Industrial Training and Manpower Development, Adamson Ayinde, commended the association-based lending model, saying it would strengthen monitoring, improve accountability and reduce the diversion of government-supported loans and equipment.
The Grow Fund is expected to expand access to affordable finance for small businesses while supporting enterprise growth, job creation and economic development across Nigeria.
