The current Nigeria has grown such that the need to access financial growth is becoming rapid, especially for business owners, entrepreneurs, students, and farmers. One of the ways to get this done is by grants. While grants are useful for the growth of a person and that of the economy, there are important things to know before applying for loan grants in Nigeria.
If you want to apply for a loan grant in Nigeria, whether from the government, private sectors, or international agencies, here are the 5 important things to know before applying for a loan grant in Nigeria.
5 important things to know before applying for a loan grant in Nigeria
1. Understand the Difference Between a Loan and a Grant
First of all, you need to understand the difference between a loan and a grant. I have made these definitions in our last post; however, let me quickly differentiate a loan and grant in a tabular form.
|
Loan |
Grant |
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These are borrowed funds that must be paid back within a specific time with or without interest (sometimes with interest). |
These are non-repayable funds given for a specific purpose, such as business, scholarship, etc. |
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Loans can be given by financial institutions, commercial banks, and microfinance banks with specific conditions on how to pay back. |
Given by government agencies, international organizations, or NGOS. |
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They are not competitive; just meet the requirement, and the loan will be awarded |
Highly competitive and requires tough measures and an application process. |
2. Know the Eligibility Criteria and Requirements
The second important thing you should know is the eligibility criteria and requirements. Loan grants have specific eligibility criteria, and the first question you must ask yourself is, “Do I qualify for this?”
According to the Nigerian system, some of the eligibility criteria to consider include
3. Create a solid business plan or proposal.
Before applying for a loan grant, one of the important things is providing a solid business plan or proposal. A well-prepared business plan should have an executive summary. This is a straightforward overview of your company or project, including its purpose, vision, and objectives.
4. Be wary of scams and fake grant offers.
The social media space is full of scams with advertisements showing “easy loan approvals.” So bad that many fall for this because they need this fund. One thing you should know is there is no need to be in a rush when applying for a loan grant. This is a long process, so take it easy and be careful.
There are legitimate grant schemes available, such as
An example of a loan scam is this: someone asking you to pay ₦5,000 to process your grant or buy a form to register. RUN!!! It’s a red flag. Most well-known and respected loan grant bodies don’t ask for upfront payment. So what are the tips to avoid scam traps?
5. Be Ready for Monitoring, Reporting, and Accountability
Many Nigerians believe that once a grant is disbursed, the tale ends. In reality, it’s only the beginning. Whether you obtain a loan or a grant, responsibility is essential. You will be asked to keep records, provide documentation of how the money was used, and, in certain situations, report results or give frequent updates.
For example, foreign donors such as the World Bank and USAID frequently need quarterly reports or physical project inspections. Even Nigerian government-backed grants, such as the NIRSAL AGSMEIS loan (CBN) or LSETF funding, may dispatch monitoring officials to verify your claims.
If you are careless with documentation, fail to follow agreed-upon terms, or divert funds for personal use, you may face serious consequences, such as being blacklisted, fined, or forced to refund the money.
So ask yourself:
Being responsible boosts your chances of securing future opportunities, since many funders prefer applicants with a track record of openness and success.
Grant Opportunities for Nigerians
The following empowerment grants and loans are currently available to Nigerians who wish to participate. Register now. Please keep in mind that these opportunities are only available for a limited time, so we recommend that you click on the link in this post to read the full requirements for each opportunity and then click on the application link to submit your application before they close.
NAPEP is an initiative aimed at alleviating poverty as a result of Nigeria’s present economic issues. Nigerians who engage in the program get N100,000 stipends. NAPEP provides vocational trade training for youngsters, internship opportunities, and micro-credits to Nigerians who have learned skills but lack the funds to launch their businesses.
The Shell LiveWire Grant is a grant program organized by Shell Nigeria for Nigerian youth with entrepreneurial skills or ideas who require funding to expand their business or launch their idea. This grant is an annual program available to some selected Nigerian states, though there are currently two versions to ensure that as many Nigerian youths as possible are supported. The sum paid to each participant varies according to their business and the concept presented.
The presidential palliative loan program, often known as PPL, was inaugurated in December 2023 with a $75 billion budget. According to its application page, the loan is intended to mitigate the impact of the elimination of gasoline subsidies on Nigeria’s micro, small, and medium-sized enterprises. This lending site was introduced with its sibling scheme, the Presidential Conditional Grant. While the application for the latter has now closed, the site for the former is still available (as of this writing), and you may apply if you have a registered business name.
The Nigeria Youth Investment Fund (NYIF) loan program, introduced under the Buhari government and supported by the CBN, was initially intended to be a three-year ring-fenced fund for inventive Nigerian youngsters with fundable ideas. The program’s initial launch description said that it will distribute between N250,000 and N3,000,000 (two hundred and fifty thousand Naira to three million Naira) to youth-owned businesses/startups.
The Tinubu government formalized the initiative with the introduction of NEXTGEN BANK following the 2023 batch (which was supposed to be the final one). In May 2024, the Federal Government granted N110 billion to revitalize the National Youth Investment Fund.
With the institutionalization of the NYIF, Nigerian youths can now apply for loans through the NEXTGEN bank while also gaining skills and other necessary development in various centers set up alongside the bank.
Accion Microfinance Bank has been in operation in Nigeria for over a decade, and they have consistently provided loans to Nigerians who match their conditions.
Their lending programs often provide weekly to monthly payback plans based on the amount borrowed and the individual’s agreed-upon return policy. Their loan amounts range from N50,000 to N5,000,000 Naira, based on your credit history, visible side of business, and capacity to repay prior loans.
Lapo is a well-known name in the Nigerian SME business market, particularly among women-owned enterprises. Lapo Microfinance Bank, like Accion, has been in the loan industry in Nigeria for more than 15 years and is still striving. Their lending plan is arranged in clusters, generally with a female leader who guarantees that other members repay their debts every week.
Lapo also provides monthly loan programs and savings plans in addition to individual loans to encourage consumers to save for rainy days. The loan amount normally varies between N50,000 and N1,000,000. Before a loan is provided, the head of the cluster or the account manager of the cluster comes for a business evaluation to guarantee you can return the loan when given.
Grooming Center Microfinance Bank may not be as ancient as Lapo or Accion, but it has been operating for a while and has provided loans to both small and medium-sized enterprises in Nigeria. Their lending scheme is similar to Lapo’s, with significantly cheaper interest rates. At grooming, each loan is paid alongside a savings program, which means that as you repay your loan, some money is automatically sent into your savings account weekly, based on the size of your loan and our agreement.
In conclusion, don’t be carried away by the appeal of “free money” because there is nothing like that in Nigeria. Obtaining a loan grant in Nigeria doesn’t look as easy as it sounds, so before applying, take out time to go through the 5 important things listed in this article.
Note: Loan grants are not lottery winnings or bet9ja sure games; they are investments with potential. Therefore, treat them with seriousness because it won’t just increase your chance of approval; it will also make funders return to you for more offers.
