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Federal Government Begins Disbursing Conditional Loans to Nigerian Businesses And Vulnerable Nigerians

Terfa Ukende
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The Federal Government has officially commenced the disbursement of the Presidential Conditional Grant Scheme to verified applicants. According to the Minister of Industry, Trade and Investment, Doris Aniete, the first phase of disbursements has been made to an unspecified number of beneficiaries. By Friday, April 19, 2024, a substantial disbursement will be made to many more verified applicants.

Support for Manufacturers and Vulnerable Groups

The N200 billion funding is aimed at supporting manufacturers, businesses and vulnerable groups across Nigeria. When announcing the grant eight months ago, President Bola Tinubu stated his administration’s determination to strengthen the manufacturing sector, boost its capacity to expand and create decent jobs. The grant is expected to cushion the impact of the government’s economic reforms on businesses.

Verification and Disbursement Phases

The ministry had directed applicants to submit their National Identification Numbers to meet the requirements for obtaining the grant. The disbursement process is ongoing in phases, and while some beneficiaries have received their grants, not all applicants will get theirs on the initial date. However, the ministry reassures that all verified applicants will eventually receive their grants in subsequent phases.

Boost for Businesses and Job Creation

The Presidential Conditional Grant Scheme is a boost for manufacturers, businesses and vulnerable groups in Nigeria. By supporting the manufacturing sector and small businesses, the grant is expected to expand their capacity, enable growth and drive job creation in the country. The phased disbursement strategy shows the government’s commitment to inclusive delivery of the funding to verified beneficiaries. With many businesses facing difficulties due to the economic reforms, the grant will provide timely relief and support their recovery.

Overview of the Presidential Conditional Grant Scheme

The Presidential Conditional Grant Scheme was established to provide financial assistance to vulnerable Nigerian businesses and citizens adversely affected by the economic reforms. The scheme offers three categories of grants:

Grants for Small Businesses

Targeted at small businesses with 10 to 50 employees, this grant aims to support business continuity and safeguard jobs. Disbursements are based on the number of employees, with higher amounts for businesses with more employees. To qualify, businesses must be registered, have been in operation for at least two years, and show a minimum 30% drop in revenue.

Grants for Startups

This grant targets businesses registered within the last two years that have been unable to raise funding due to the economic climate. Qualifying startups can receive up to ₦10 million to support key business operations. Applicants must have a viable business plan, show market potential, and secure matching equity investment.

Grants for Vulnerable Individuals

This grant provides temporary income support for vulnerable individuals who lost their source of income due to the reforms. Qualifying individuals can receive ₦30,000 per month for 3-6 months. Applicants must not be receiving income from any other source and must meet a minimum income threshold prior to loss of income.

To ensure efficient and transparent disbursement, the Ministry partnered with reputable organizations to verify applicants and process approved grants. Disbursements commenced in April and will continue in phases until the allocated funds have been distributed to all approved applicants. The Presidential Conditional Grant Scheme demonstrates the government’s commitment to safeguarding businesses and livelihoods during economic recovery.

Loan Amounts and Eligibility Criteria for Businesses

SME Loan Category

Small and medium-sized enterprises (SMEs) with a minimum of two years in operation can apply for loans ranging from N5 million to N50 million, depending on their business sector and credit score. Applicants must be registered businesses with the Corporate Affairs Commission and have audited financial statements for the last two years. The loans have a fixed interest rate of 9% per annum, with a maximum tenor of seven years, including a moratorium period of 12 months.

Manufacturing Loan Category

Registered manufacturing companies can access between N50 million to N500 million in funding to boost their production capacity, upgrade equipment, improve product quality, and expand into new domestic or export markets. Applicants must have been in operation for at least five years and meet the minimum asset base and turnover requirements based on their sub-sector. The loans have an interest rate of 7% per annum, with a tenor of 10 years, including an 18-month moratorium.

Women in Business Loan

Female business owners can apply for loans ranging from N3 million to N50 million to grow their businesses. Applicants must have a minimum of two years in operation and meet specific requirements based on business sector and location. The loans have a concessionary interest rate of 5% per annum, with a maximum tenor of seven years, including a 12-month moratorium period. At least 60% of the loan amount must be applied to working capital, with the balance for equipment upgrade and business expansion.

To be eligible for funding under the Presidential Conditional Grant Scheme, businesses must be Nigerian-owned, have a verifiable company registration, and audited accounts for the required number of years based on the loan category. Applicants will undergo a rigorous due diligence process to verify information provided in their applications. The grants are intended to cushion the impact of ongoing economic reforms, strengthen domestic manufacturing capacity, and boost job creation across the country.

How the Grants Will Support Nigerian Manufacturers

The Presidential Conditional Grant Scheme aims to provide financial relief to Nigerian manufacturers and vulnerable small businesses. Enhanced Liquidity and Working Capital The grants will provide manufacturers and small businesses with enhanced liquidity and working capital to continue operations during economic difficulties. With additional funds, businesses can pay employees, settle outstanding debts to suppliers, and procure raw materials to continue production.

Expanded Production Capacity

For some manufacturers, the grants will allow for investments to expand production capacity by procuring additional machinery and equipment or expanding facilities. With increased capacity, manufacturers can produce more goods to satisfy demand, gain economies of scale, and increase competitiveness.

Preservation of Jobs

With financial support, manufacturers and businesses can avoid employee layoffs during economic downturns. The grants allow companies to pay employee salaries and benefits to retain talent and human capital. Job preservation is crucial for economic stability and growth.

Growth Opportunities

For innovative and growth-oriented manufacturers, the grants present opportunities to develop new products, enter new markets, or make strategic investments for long term success. With financial security, companies can take calculated risks to grab new opportunities that position them for future growth.

The Presidential Conditional Grant Scheme demonstrates the government’s commitment to supporting and strengthening the manufacturing sector. By providing much-needed financial relief, the grants will help manufacturers and small businesses survive economic difficulties, protect jobs, and continue contributing to economic growth. With the additional funds, companies across industries can implement strategies to build resilience and position themselves for sustained success beyond the current challenges.

With the phased rollout underway, verified applicants can look forward to receiving their grants in the coming weeks and months. This grant funding will provide meaningful relief and empowerment to manufacturers, small businesses, and individuals across the country who have been impacted by recent economic reforms. As the government stays committed to strengthening local industry and expanding economic opportunities, the future looks brighter for Nigerian enterprise. Persevere through this challenging season, continue operating ethically, and remain hopeful for better days ahead. Read Similar Story

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