Nigeria is opening its doors to startups in the tech and agric sectors. Going forward, startups in both sectors now have access to funding opportunities for their businesses, powered by the Nigerian government. Nigeria’s Vice President Yemi Osinbajo says the new Bank of Industry’s $20million technology fund for young innovators and Nigeria’s central bank (CBN)’s N90billion ($247mn) soft loan facility for small scale agricultural enterprises are President Muhammadu Buhari-led administration’s efforts to support MSMEs.
Here Is All You Need To Know
- These were some of the outcomes of a meeting at the Presidential Villa, Abuja, on Tuesday presided over by Vice President Yemi Osinbajo to review progress on President Muhammadu Buhari-led administration’s efforts to support MSMEs.
- The Nigerian government in a statement said the moves were in furtherance of the Buhari administration’s drive to support Micro, Small and Medium Enterprises (MSMEs).
- The statement also said the National MSMEs clinics, driven by the Vice President, have now reached 26 States, with more Clinics to come in the series. The statement also pointed out that the National Agency for Food and Drug Administration and Control (NAFDAC) is now poised more than ever to register more Nigerians venturing into the food and drug businesses.
How To Access The $20 Million Tech Fund From Nigeria’s Bank of Industry
In selecting which tech startups to fund, the Bank of Industry usually has recourse to:
- Capacity to substantially add to industrial output.
- Projects that use largely domestic raw materials.
- Industry in which Nigeria’s comparative advantages could be converted to competitive ones.
- Ability to promote the expansion of exports through the production of high quality products that are attractive to domestic and export markets.
- Niche projects that produce for worldwide consumption.
- Projects that create both forward and backwards linkages, with the rest of the domestic or regional economy.
- Ventures that promote inter-state or regional integration.
- Small and medium enterprises (SMEs) that have linkage with large firms, belong to clusters and operate under franchise.
- Enterprises with high employment generation capacity.
- The project must be technically feasible, commercially viable and economically desirable.
- Projects that are environmentally friendly.
- Enterprises that have good management set-up and proper accounting procedures.
- Enterprises promoted by women entrepreneurs.
Please Click Here for Pre and Post Approval Documentation
For more information on the tech fund contact Bank of Industry on (+234) 0700-CALL-BOI or visit https://www.boi.ng/lendingcriteria/
Read also: Here Is The Nigerian Central Bank ’s Guidelines On How To Access Creative Industry Loan
How To Access The $247 mn Agric Loan Facility From The Central Bank Of Nigeria
This CBN Agric Loan facility is usually made available to participating banks to finance commercial agricultural enterprises.
The agricultural businesses and startups eligible for this Central Bank of Nigeria Agric Loan (or CACS) are any farm or agro-based enterprise with agricultural asset (excluding land) of not less than N100 million for an integrated farm with prospects of growing the assets to N250 million within the next three years and N50 million for non-integrated farms/agro-enterprise with prospects of growing the assets to N150 million, except in the case of on-lending to farmers’ cooperative societies.
If your agricultural business meets the CBN asset requirements above, it must also be involved in the following commodities and value chain in order for you to get the CBN Agric Loan:
PRODUCTION:
- Cash Crops: Cotton, Oil Palm, Fruit Trees. Rubber, Sugar Cane, Jatropha Carcus and Cocoa.
- Food Crops: Rice, Wheat, Cassava, Maize/Soya, Beans/Millet, Tomatoes and Vegetables
- Poultry: Broilers and Eggs Production
- Livestock: Meat, Dairy and Piggery
- Aquaculture: Fingerlings and Catfish
PROCESSING: Feed mills development, threshing, pulverization and other forms of transmutation for value addition.
STORAGE: Commodities, Agro-Chemicals and Warehousing
FARM INPUT SUPPLIES: Fertilizers, Seeds/Seedlings, Breeder Stock, Feeds, Farm equipment & machineries.
MARKETING: Agricultural commodities under the focal investment areas.
This Central Bank Nigeria Agric loan can be accessed by startups through participating deposit money banks in Nigeria. For example, in order for you to access the CBN Agric Loan, First Bank of Nigeria created some innovative financial products. In addition to helping you access the CBN Agric Loan, these products will also fund your agricultural business that fall outside the scope of businesses eligible for the CBN Agric Loan.Some of these financial products are:
Conventional Term Loans & Overdrafts
This credit facility is for medium and large scale agricultural businesses whose profile fall outside retail or special government intervention fund product specification
- Maximum tenor of up to 5 years
- Minimum single obligor limit of N10million
- Interest rate is the prevailing commercial lending rate
Enterprises that are engaged in agricultural/agro-allied businesses (medium, large enterprises, corporate and institutional banking clients)
- Flexibility: the structure, tenure and transaction dynamics can be customized to accommodate all types of agricultural projects.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer.
He could be contacted at udohrapulu@gmail.com