Chioma Vivian James
The Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) has launched a N500 million zero-interest Grow Fund to provide affordable financing for Micro, Small and Medium Enterprises (MSMEs), in a major move to strengthen entrepreneurship and stimulate economic growth across the country.
The initiative was unveiled over the weekend as part of activities marking the 2026 World MSME Day. It is expected to tackle one of the most persistent challenges confronting Nigerian small businesses, limited access to affordable capital.
Speaking during a media briefing, SMEDAN Director-General, Charles Odii, said the revolving loan scheme would be disbursed through registered cooperatives, trade unions, business membership organisations and other recognised associations instead of directly to individual entrepreneurs.
According to him, the association-based model is designed to promote transparency, strengthen accountability, improve loan recovery and ensure that financial support reaches genuine business owners with verifiable enterprises.
Odii explained that the decision followed extensive engagements with traders and entrepreneurs across the country, many of whom identified access to affordable financing as their greatest business challenge.
“We visited traders at one of the markets today because policymaking should be driven by the realities on the ground. It is not enough to remain in our offices making decisions without listening to the people whose businesses we are trying to support,” he said.
He noted that high interest rates and stringent lending conditions have continued to prevent many small businesses from accessing the capital needed to expand, making the zero-interest Grow Fund a timely intervention.
The SMEDAN boss said beneficiaries would be able to utilise the facility to increase working capital, acquire modern equipment and tools, secure business premises and improve productivity, competitiveness and overall business sustainability.
“We are not giving the money directly to individuals. We are working through associations because they understand their members, can identify credible beneficiaries and help manage the funds responsibly,” Odii added.
He disclosed that repayment arrangements would be agreed upon with each participating association, allowing for flexible terms that would sustain the revolving nature of the fund and enable more entrepreneurs to benefit over time.
Odii further revealed that the initial N500 million represents only the first phase of the initiative, expressing confidence that the fund would expand through strategic partnerships with state governments, development partners, financial institutions and other stakeholders willing to provide matching funds.
Beyond the financing initiative, the Director-General announced that SMEDAN is currently reviewing the draft National MSME Policy before forwarding it to President Bola Ahmed Tinubu for approval.
He said the revised policy is expected to provide a more robust framework for enterprise development by improving the ease of doing business, encouraging innovation, enhancing access to finance and strengthening the competitiveness of Nigeria’s MSME sector, which remains one of the country’s largest sources of employment and economic activity.
The unveiling of the Grow Fund underscores SMEDAN’s renewed commitment to empowering small businesses, deepening financial inclusion and creating an enabling environment for entrepreneurs to thrive. Stakeholders believe the initiative could significantly boost the growth of Nigeria’s MSME ecosystem and contribute meaningfully to sustainable national economic development.
