Bringing to you again one of the ways to get a loan in Nigeria. This time, it is SMEDAN loan.
The Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) was created by the SMEDAN Act of 2003 to strengthen enterprises and also provides support to entrepreneurs.
This move was initiated by the need to make credit products easily accessible to entrepreneurs and investors.
The roles played by both in nation-building can not be undermined. Among such roles is the provision of employment to people, skills development, conversion of raw materials into useful products and improving the living conditions of the people.
With the change brought by this move, one could conclude that the establishment of Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) was the right call.
How does SMEDAN loan work?
Here is the big picture I think everyone should be aware of. SMEDAN does not really give out the loan, they only serve as a link between Micro, Small and Medium Enterprises (MSMEs) and loan providers. These loans can be from internal and external sources of finance.
Nevertheless, SMEDAN also has its own programmes. NADEP was introduced during Jonathan Goodluck’s regime. The objective of NADEP is to create not less than 5 million jobs within a few years.
In a bid to bring the objective into fruition, The Federal Government gave massive support to the Micro, Small and Medium Enterprises (MSMEs). These enterprises have been known to have the most to do in ensuring reduction of poverty, wealth creation, provision of employment as well contributes to economic development.
Moreover, SMEDAN is actively working with other institutions, comprising of both private and public sector to create an enabling environment for business to thrive.
SMEDAN is more like a platform for timely loan information for any kind of venture you are embarking. In other words, you will come across a storage of information from several credit providers coupled with terms and conditions guiding it.
Loan products available on SMEDAN
There are up to 4 kinds of loans an applicant can access on SMEDAN, they are:
#1. Personal loan
A personal loan is an amount of money borrowed at a fixed rate and repayable within the agreed period of time.
The type of loan normally does not come with no collateral; in most cases, borrowers are given freedom to use the funds as they want. Personal loan is quite different from a mortgage loan or business loan in the sense that a mortgage loan has a specific purpose compared to the other.
A personal loan is otherwise called unsecured loans or signature loans because it is a collateral-free loan.
#2. Business loan
Either new business idea or business currently running, money is always needed to fuel them. As such, investors and entrepreneurs usually approach banks or lenders for business loans.
Therefore, a business loan is a loan that is precisely used for business motives. Business loans are always a good idea, but most entrepreneurs often make a mistake.
It is inadvisable to use a loan to start a business, loans should only be used to improve a business unless you have been able to estimate it and sure of a very decent run of revenue to repay them.
#3. Mortgage loan
Unlike a personal loan, a mortgage loan is a loan in which collateral is released to the loan provider (usually banks) pending the time the borrower pays back.
This type of loan majorly works in 2 ways, you can decide to use your property or real estate to secure the purchase of another one. The other is taking cash from lender, say a bank to purchase the home, the bank then becomes the temporary owner until you pay back the loan plus an agreed-upon interest rate.
This type of loan is mostly taken by Government officials or workers under the Federal Government.
This loan is to help you access loan in the shortest time possible. There is almost no difference between a loan and a credit.
Credit is just a form of mobile loan. You are given the freewill to purchase goods and services based on the condition to pay back the funds plus additional agreed-upon charges as agreed.
Who are the lenders on SMEDAN?
The loan providers are within your neighbourhood. The dedicated credit information portal, www.smedan.gov.ng ensures you find a loan provider that suits your needs.
Smedan loan are given by financial institutions which include microfinance banks, commercial banks industry and Micro, Small and Medium Enterprises (MSMEs) funds by the Central Bank of Nigeria (CBN)
Benefits of using SMEDAN
- Access to a huge base of loan providers.
- Enjoy competitive interest rate.
- Freedom to apply as a sole owner or as a group.
- Have enough funds to explore untapped opportunities and extend your reach.
- This service is proudly supported by the federal government and regulatory bodies.
- Free business advice from professionals.
- Make a thorough investigation using large stock of information available on SMEDAN to decide which is best for your business.
Documents needed to get a loan from SMEDAN loan
Requirements vary, however, the common documents usually needed to complete a loan from lenders are:
- Any government-issued ID card (national ID, driver’s license, voter’s card or international passport)
- Any utility bills.
- Staff ID Card if you are salaried worker.
- Recent bank account statements.
Certificate of incorporation of your business.
- Audited financial statements.
Loan interest rate, repayment period, and amount on SMEDAN
Like I stated at the beginning of this article, SMEDAN only acts as a go-between, the amount of loan anyone could access including the repayment period and charges depends on each financial institution.
Personal loans always have the shortest time as compared to others, normally from 3 months to 60 months. Others get the most nods especially mortgage loan whose interest rate could go as far as 25 years.
To be exactly cleared about the interest rate on each loan, you will have access to a repository of information concerning the offer before making up your mind.
This information can be gotten from SMEDAN or from the contact details provided by each participating institution on their page.
How to apply for SMEDAN loan
There are lots of institutions on the ground to help with your loan. To apply for SMEDAN loan, simply follow these guides:
- Go to SMEDAN’s website to get started. To access each participating institution, click on the menu bar on the website or follow this link
- Tap “loan providers” or “access loans” which will give you different options that you can select based on the nature of your loan.
- We will use the other means which is clicking on “loan providers” Commercial banks, microfinance banks, mortgage banks and other institutions are all available on SMEDAN’s credit information portal.
- On this information portal, you will get the loan details after clicking on the highlighted icon. Among the information provided are loan tenure, interest rate, and loan amount.
- Click on the highlighted “Get Started” to apply for a loan. You are required to provide your details including the purpose of the loan.
- Tap “submit information” to complete this section. The duration required to process the loan depends on each participating institution. Most loans are completed in less than 2 hours.
- In no time, you will be provided with feedback concerning your loan. It could come in the form of approval or rejection depending on how creditworthy you are.
SMEDAN contact details
Address: 35, Port-Harcourt Crescent, Area 11, Garki, FCT-Abuja, Nigeria.
The development brought by SMEDAN deserves accolades, yet the programme has not been implemented in all states in Nigeria. Abuja, Lagos, and Kaduna are the only ones that have benefited enormously in the programme.
To ensure the programmes under SMEDAN fully serves its purpose, those in the grassroots also need to be touched.
Other programmes under SMEDAN are LIFE PROGRAM TARGET AUDIENCE, HP lite, N-SEP and SPX. All work hand in hand to ensure full execution of the objectives of SMEDAN.
Regardless, there are other loan providers that may not be on SMEDAN, they are Credit wallet, Jumia loan, Aella Credit, Paylater, and fairmoney loan. These loan providers grants loans in less than 5 minutes after approval and with no collateral.