Interest Free Loans In Nigeria
There has been a lot of queries recently about interest free loans in Nigeria. Some like; are there banks offering interest free loans? Is there any government interest free loans in Nigeria?
To answer this questions, we will take a look at it from two angles.
First, who gives out loans to individuals and businesses
Secondly, Why do they offer loans and what’s the catch.
Financial institutions like commercial banks, micro finance banks, agricultural banks, government agencies, central bank, cooperative societies and FinTechs are among those who lends to individuals and business either to cover personal expenses, to start a business or to expand an already established business.
The main reason these financial institutions lend funds to individuals and businesses is for the sole purpose of making profit. This is where the loan interest comes into play. If this financial institutions removes the interest rate out of their loans, they won’t be making profit.
So to answer the questions, in terms of commercial value, there are no commercial banks giving interest free loans Nigeria. But there are institutions that you can still get access to funds without the need to pay any interest. Read on to find out.
But the question here still remains, are there interest free loans in Nigeria
Let’s tackle it from this angle. When money is offered to an individual or an organization without the need to pay interest on the borrowed capital, sometimes the principal is not to be repaid, it is known as a grant.
So to answer the question if there are are interest free loans in Nigeria, we can now comfortably say yes. In Nigeria, there are are lot of government loans to individuals and businesses in the form of grants. Most of the time, the principal is required to be repaid.
Now that we have established that individuals and businesses can access funds without paying interest, lets look at some of the ways this can be achieved.
Some of the organizations giving out interest free loans (grants) and ways access them
Below, we will discuss briefly on some organizations offering grants to Nigerians and the requirements to apply for it.
Tony Elemelu Entrepreneurship Program
This program was founded by the Nigeria’s top businessman Tony Elemelu. This program is organized on a yearly basis and was launched in 2015 with the sole mission of providing funds for African entrepreneurs.
Tony Elemelu Entrepreneurship Program usually chooses 1,000 entrepreneurs from over 50,000 eligible applicants yearly. The process of selection is done by certified business experts across Africa and winners are selected on a basis of accurate financial models, market feasibility and the overall ability to keep the business afloat.
To apply, you must pass these checklist
Business must be based in Africa
Business must be profit oriented
Your business must be between 0-3 years or a startup
You must have the legal rights to work in the country applied from.
Applicant must be from 18 years and above
Grofin is one of the African private development institution, with the aim of providing funds and business support for small and medium scale businesses operating in this region.
As of the time of publishing this article, their funding is businesses under these sectors; Agriculture, education, healthcare, energy, water, sanitation and recycling.
Your business must be profit oriented
Your business must be located in any of these countries; Nigeria, Zambia, Egypt, Ghana, South Africa, Tanzania, Kenya, Rwanda, Uganda, Ivory Coast, Iraq, Jordan and Oman.
The business owner must be involved in running the business
Your business turnover should be below 15 million US dollars and your assets below 6 million US dollars
You require a funding of 100,000 USD – 1.5 million USD
Your business must be in any of these sectors; agriculture, education, healthcare, energy, water, sanitation and recycling.
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Applying businesses must be in any of the following sectors; education, research institution, business membership organization, non governmental organization or in partnership with at least 3 of the following sectors; private sector company that is profit oriented, partnership or a sole proprietor.
Business must operate in Nigeria
Funding requested must be in these range; minimum 50,000 USD and 250,000 USD
The company must provide funds for at least 50 percent of the proposed budget sum
Applicants must comply with the environmental and social requirements
African Entrepreneurship Award
This program is sponsored by BMCE bank of Africa with the aim of providing a mentorship platform and business grants to eligible business ideas.
The program offers funding to two categories of business; innovation and sports entrepreneurship.
Your business idea must be profit oriented
Your business idea must be targeted towards the African region and must be technologically inclined
Applicants must be at least 18 years and must be a citizen of any African country
Application not running currently
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Africa’s Young Entrepreneurship Empowerment Nigeria (AYEEN)
This empowerment program has run for quite a long time. its main aim is geared towards mentoring, guiding, providing funds for great business ideas in Nigeria. This empowerment program accepts entrepreneurs from all states in Nigeria annually. Through their strategies, entrepreneurs can get funded for their business ideas or gain access into any of their business skills training in the area of starting and expanding an already established business.
Applicants must have a running business in Nigeria
Entrepreneurs must be at least 18 years of age
The business or business ideas must be profit oriented
As we have noticed from this article, one of the ways to acquire interest free loans in Nigeria is in the form of grants. Always have a viable business plan as an entrepreneur, this will be needed in most of the process for funding request.