Lagos State Partners BOI, Sterling Bank to Launch Single-digit, No-collateral Loans for SMEs
- Lagos state is home to the highest number of SMEs in Nigeria, contributing to its GDP growth and status as the commercial capital
- The government has taken a major step to resolve the access to funding problem, which keeps many businesses small
- The LASMECO fund presents a unique initiative for SMEs to access loans with single-digit interest rates and no collateral
Legit.ng journalist Ruth Okwumbu-Imafidon has over a decade of experience in business reporting across digital and mainstream media.
One of the critical problems faced by small and medium businesses in Nigeria is access to finance. As the second-largest commercial hub in Africa, Lagos state is looking to solve the problem for SMEs in the state.
Lagos state governor, Babajide Sanwo-Olu, has unveiled a funding initiative, the Lagos State Access to Finance for SMEs through Cooperatives (LASMECO).
This will allow SMEs to access loans with zero collateral and at single-digit interest rates.
Source: Getty Images
The governor noted that the beneficiaries of the programme would be reached through the registered cooperatives in the state.
The Memorandum of Understanding (MoU) was signed between the state government, Managing Director of BOI, Dr Olasupo Olusi, and the Sterling Bank representative.
LASG partners BOI, Sterling Bank
Speaking at the unveiling at the Adeyemi Bero Auditorium, Alausa, Ikeja, Governor Sanwo-Olu disclosed that the state was partnering with the Bank of Industry (BOI) and Sterling Bank to bring the initiative to life.
He stated that under the initiative, SMEs will access up to N10 million loans at 9% interest rate per annum, for up to three years.
Sanwo-Olu urged the beneficiaries to take advantage of these low-interest, risk-mitigated loans to grow their businesses judiciously.
He said:
“This occasion, the launch of the joint initiative between the Lagos State Government, Bank of Industry, and Sterling Bank MSME Fund, is not just a formal unveiling of a financing programme. It is the unveiling of dreams, the lighting of thousands of small candles that together will illuminate the path to a more prosperous and inclusive Lagos.”
How LASMECO will operate
The Nation reports that the loans from this initiative will target strategic sectors especially:
- Healthcare;
- Agriculture;
- Creative industries;
- Manufacturing;
- Circular economy clusters.
The governor explained that the rationale for the project was to help young and hardworking entrepreneurs who might never scale their business because of no access to finance.
Source: Getty Images
He referenced the story of a young seamstress, Bisola, in Alimosho, whose business remained stunted for years until the Lagos state support scheme for small businesses granted her a low-interest loan in 2020. With the loan, she got more machines and hired more hands to scale her business.
He added that with proper application, these small businesses can turn around the economy of Lagos state, just like other loans that target women and youths.
Small business owners can access the loans by walking into a Sterling Bank branch within Lagos state.
Lagos state gives 4,600 SME loans
In a move to boost job creation, the Lagos State Employment Trust Fund gave out N1.17 billion in loans to small businesses.
About 91% of the beneficiaries who received the loans in 2024 have successfully repaid the loans.
The LSETF has also entered into another agreement with USAID to train 10,000 Lagos residents and connect them with jobs.
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Source: Legit.ng
