KEY POINTS

• SMEDAN unveiled a N500m zero-interest revolving fund for MSMEs on World MSME Day.
• The agency will disburse it through associations, not individuals, to aid recovery.
• A draft National MSME Policy proposes single-digit loans and 30 percent procurement set-asides.

The Small and Medium Enterprises Development Agency of Nigeria has unveiled the Grow Fund for Small Businesses in Nigeria, a N500 million zero-interest fund for Micro, Small and Medium Enterprises. The SMEDAN Director-General, Charles Odii, announced the initiative in Abuja as part of activities marking the 2026 World MSME Day.

A fund built around associations

According to Odii, the revolving loan will flow through cooperatives, trade unions, business member organizations and associations rather than to individual entrepreneurs. He argued that the association-based model would improve accountability and loan recovery, while it ensures the funds reach genuine business owners.

Moreover, Odii said the agency designed the financing after engaging traders directly. “We visited traders at one of the markets today to engage directly with them because it is not enough to sit in offices and make policies without understanding their realities,” he said. According to him, many of the challenges they raised centered on financing, which prompted the launch.

Furthermore, he said beneficiaries could use the zero-interest fund to boost working capital, procure workspaces and acquire tools. “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 said. In addition, he noted that each association would agree its own repayment terms, a flexible arrangement that lets the revolving fund reach more entrepreneurs.

Bigger reforms on the way

Consequently, Odii said the initial N500 million would grow through partnerships with state governments, development partners and other institutions willing to provide matching funds. He framed the scheme as a first step rather than a final solution.

The SMEDAN boss also said the agency is reviewing the draft National MSME Policy before forwarding it to President Bola Tinubu for approval. According to him, the proposed reforms include single-digit interest loans for MSMEs, reserving 30 percent of government procurement for small businesses and removing age limits from intervention programmes.

Ultimately, Odii said SMEDAN would engage relevant regulators on other concerns affecting small businesses, including advertising registration requirements. By pairing immediate financing with broader policy reform, the agency signaled a push to ease the credit squeeze that has long held back Nigeria’s vast MSME sector, which employs millions and anchors much of the informal economy.