5 Places to Get Small Business Loans for Startups in Nigeria

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Looking to finance your small business or startup with a loan? Or looking to build a startup MVP using a loan instrument?

Then you are not alone.


According to the Informal Economy Sector report, over 12% of small businesses in Nigeria seek loans from banks while 15% of them access loan funding via loan apps.


Interestingly, many Nigerian SMEs choose to go the way of loans as a way of accessing non-equity financing for their businesses, and many have been able to grow their businesses that way.


So, if you're looking to get a small business loan, this post will show you a few options to try.

While some loans can be accessed via mobile apps, others will require you to physically visit their bank or agent offices to apply. 


If you've decided to get a loan for your small business, the following options will interest you.

Grooming Micro Credit

Grooming MFB offers one of the best line of credit for small businesses in Nigeria via its micro credit instrument.


The bank is focused on financing women-led micro businesses and mom and pop shops in the informal sector.


If you are running a small business in the informal sector and it's a woman-led business, then you can access up to 200k Naira with Grooming micro credit loans.


The interest rate for grooming micro credit ranges from 3% to 10% APR.

Accion Monie

Accion MFB offers SME loans via its Accion Monie app which targets budding SMEs looking to expand their business.


With Accion Monie, small businesses can access up to 500k with tenures of up to 12 months to scale their businesses.


The average interest rate for Accion Monie SME loan is 4.7%

Prospa

Prospa is offering SMEs the tools and technology to run and manage their business on the go via the Prospa app.


Business owners can track sales, create  and send invoices, and manage transactions right from the mobile app.


But prospa also offers small business loans to businesses using their platform.


Loans are offered based on trust determined by volume of transactions and business history.


The average interest rate for a Prospa loan is 20%.

Moniepoint

Moniepoint operates in a similar way to Prospa. They are offering SMEs the tools and technology to run, manage and grow their business.


Moniepoint focuses on financing small businesses and retail shops that use their POS terminals for transactions.


Loan offerings depend on periodic volume of transactions and credit history, as they offer loans in installments.


The more a user proves their creditworthiness with lower loan amounts, the more qualified they are for higher loans on Moniepoint.


The average interest rate for Moniepoint is 5% to 20%.

Fairmoney

Fairmoney has grown a lot since its debut in the Nigerian financial industry. The company that started as a payday loan app is now a full-fledged licensed Microfinance bank in Nigeria.


With Fairmoney, SMEs can access loans of up to 1 million Naira tenured for up to 1 year.


The interest rate for a Fairmoney loan varies depending on amount and tenure, but the average interest rate is north of 30% APR.


Fairmoney loan is perfect for small businesses with a high turnover looking to expand their operations such as supermarkets and FMCGs.



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