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The issue of business funding has led many to abandon their entrepreneurial aspirations. Those who
have dared have experienced snail speed growth because of lack of or little knowledge of how to access
funds that could aid their bail out.
Most business owners are very much aware of some fund sources like personal savings, friends, money
lenders, contributions, co-operatives etc. Also there are those who are aware of banks but wouldnt
dare because of absurd interest charge. Unfortunately, little is known of fund sources from government.
However, in a bid to offer a life- line, the federal government has set apart a funding platform where
small business owners like you, can access collateral- free-loan. The government agency responsible for
this is the NATIONAL ECONOMIC RECONSTRUCTION FUND [NERFUND].
Establishment of NERFUND
NERFUND as it is generally referred to was established by degree No. 2 of 1989 which was the NERFUND
act, cap 254 1990 laws of the federation. NERFUND is an intervention scheme established to ensure the
speedy rise of micro enterprises in the country through the provision of medium long term loans.
The real intention of the government is to harness the large army of Nigerian businessmen and women
who merchandise imported consumer goods and re-orientate them to embark on local manufacture of
these goods. The agency is presently headed by Alhaji Maina Gimba.
NERFUND assisted projects for individuals and business groups are evident in all 36 states in Nigeria.
Earlier in February 2011, the honourable minister of finance, Dr. Olusegun Aganga gave approval to the
second set industrial project for funding under NERFUND scheme.
The minister gave his nod to the setting up of 415 micro enterprises worth a total investment cost
N998.2 million. The current number brings the total number approvals since the resumption of the
operation in 2009 to 623 projects valued at a total investment cost N1.255 billion. The business groups/
individuals who are beneficiaries are listed in NERFUND webites.
WHAT IS NERFUNDS MANDATE
NERFUNDs mandate is actually, to make long and short term micro-credit loans available to individual
[skilled men and women, retirees, young graduates etc.] and business groups involved mainly in
manufacturing, mining ,quarrying, agro-allied, industrial support services, equipment leasing and other
ancillary service. Such SMEs must be wholly Nigerian owned. The grand objectives are to increase
quantum of goods and services available for local consumption and export, provide needed
employment, expand local production base and add value to the economy.
Every Nigerian business qualifies for NERFUND funding if it is engaged in manufacturing, agro-allied
project, industrial support services, and ancillary projects provided that:
b. The enterprise or project must fall into micro, small or medium scale.
c. In the case of manufacturing enterprise or project, at least 60 percent of its raw material s and
other production inputs must be locally sourced.
e. Your business or project must be viable and must have potential to give employment.
f. Fund can be for business expansion, diversification, purchase of fixed assets like machinery etc.
The truth is preference is given to enterprises or projects located in the rural areas.
You must have a registered business name [an enterprise for a micro credit loan or limited
liability company for an SME facility].
A simple feasibility report showing viability of your business or project is required for a medium
scale enterprise and a simple business plan for a small business operator.
You must present pro forma invoice stating the price and source of proposed plant and
machinery.
Be able to contribute up to 10% equity of loan requested. Intended project shall not be into
merchandising or primary agriculture.
Provide site plan for the location of the project.
Applicants should be ready to comply with other conditions as may be prescribed by NERFUND
Such institutions could be NDE, SMEDAN, National Board for Technology incubation [NBTI],
Entrepreneurship Development Centres [EDCs] etc. The reason for these listed preconditions is that they
give credibility to your application. In the case of default of loan repayment, NERFUND holds the group
accountable than an individual. Small registered business groups or associations of 10 members can
jointly apply for a loan and when the loan is approved, the money is shared equally.
Disbursement of loan
Funds could only be disbursed after the project is approved and all conditions preceding draw down are
fulfilled. This will be done at the discretion of the NERFUND. The NERFUND will release approved loans
directly to the suppliers of the equipment, while the working capital may be released to the vendors of
the raw materials or directly to the beneficiaries.
Once you pick up the loan form, you have 30 days to get the necessary documents and submit to
NERFUND office. NERFUND can be contacted for details on how to pick up the loan application form.
NERFUND office: plot 1340, Aminu Kano Cresent, Wuse II, P.M.B 319, Garki, Abuja. Website: www.
nerfund.gov.ng.