Experts at the 2025 BusinessDay SME Conference and Awards in Lagos have highlighted a shift in Nigeria’s small and medium enterprise (SME) funding landscape, with businesses increasingly turning away from traditional bank loans in favor of innovative, flexible financing solutions. These alternative mechanisms, including crowdfunding, venture capital, credit guarantees, factoring, and government-backed funds, are emerging as critical tools for sustaining growth and boosting competitiveness in a rapidly evolving economy.
Speaking at the event themed “Driving Nigeria’s Economy, Empowering SMEs for Global Competitiveness,” Femi Egbesola, national president of the Association of Small Business Owners of Nigeria (ASBON), stressed that these new funding channels offer simpler access, lower costs, and fewer bureaucratic hurdles compared with conventional bank loans.
Crowdfunding platforms approved by the Securities and Exchange Commission (SEC) now allow businesses to raise capital from multiple investors without burdensome documentation or high-interest rates. Similarly, the NSE Growth Board provides avenues for both public and limited liability companies to attract global investment, while the National Credit Guarantee Company guarantees up to 70% of SME loans, removing the need for physical collateral.
Factoring services also provide immediate payment to suppliers after invoicing large buyers, solving cash-flow delays of 30–90 days, while leasing services enable SMEs to acquire machinery and equipment on affordable long-term payment plans. Egbesola emphasised that despite their benefits, many SMEs remain unaware of these opportunities.
Government programmes are complementing private-sector initiatives with targeted funding options such as the Rural Area Investment Fund (RAPIJO), Women GLOBE Loan, Youth Entrepreneurship Fund, and the new Agri-Fund, offering single-digit interest loans tailored to specific sectors—dramatically more affordable than commercial bank rates.
Beyond financing, the government is supporting SMEs in becoming export-ready through initiatives like the African Continental Free Trade Area (AfCFTA) support scheme, the National Single Window platform for streamlined documentation, and the Business Integrity Certification, available free until March 2025. Together, these efforts are creating a more enabling ecosystem for SMEs to grow, compete globally, and contribute significantly to Nigeria’s economic development.
