NERFUND Loans to Small Business Operators

Step-By-Step Guide to Accessing Loan from National Economic Reconstruction Fund

If there’s any peculiar hurdle most micro, small and medium (MSMEs) business owner struggle to cross, it is that of insufficient funds. For some business owners, it is fund to jump start a business while for others it is fund to take their business to the next level. 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 wouldn’t 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.

How genuine is the NERFUND loan scheme?

 NERFUND assisted projects for individuals and business groups are evident in all 36 states in Nigeria. The business groups/individuals who are beneficiaries are listed in NERFUND websites.


NERFUND’s 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:

  1. The enterprise or project is wholly owned by Nigerians.
  2. The enterprise or project must fall into micro, small or medium scale.
  3. Intended project or business is not into merchandising or primary agriculture.
  4. Your business or project must be viable and must have potential to give employment.
  5. 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.

What you must put in place to access NERFUND loan

  1. You must have a registered business name (an enterprise for a micro credit loan or limited liability company for an SME facility).
  2. 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.

  1. You must present pro forma invoice stating the price and source of proposed plant and machinery.
  2. Be able to contribute up to 10% equity of loan requested.
  3. Provide site plan for the location of the project.
  4. Submit sources and quotation of raw materials expressed in units.
  5. Applicants should be ready to comply with other conditions as may be prescribed by NERFUND

Applying for loan

Under the NERFUND scheme, any eligible Nigerian who falls under the micro, small and medium scale (MSMEs) can apply directly, either as individuals, business group, cooperatives through any of the partner institutions with which the fund signed an MOU. Such institutions could be NDE, SMEDAN, National Board for Technology incubation [NBTI], Entrepreneurship Development Centre’s [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.

Amount and Tenor that NERFUND can Give Out

The agency has capacity to disburse loans to the tune o f between N100, 000 and N5 million. The micro credit scheme shall have a maximum tenor of three [3] year s inclusive of 6 to 9 months moratorium. The interest rate chargeable on the facility would be 2% above the monetary policy rate [MPR], inclusive of administration expenses.

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.

Repayment Duration Requirement

As earlier stated, the micro credit scheme shall have a maximum tenor of three (3) years inclusive of 6 to 9 months. Loan applications after appraisal are subjected to consideration by the interim Management Committee (IMC) following which they are presented to the honorable minister of finance for final approval. 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: 26 Buchanan crescent off Aminu Kano Cresent, Wuse II, P.M.B 319, Garki, Abuja.


Email: Tel: 09-6705604, 09-6725040, 07026106770

NERFUND aims to support fifty (50) Micro Industries in each state of the Federation to establish or expand any of the following productive businesses in Nigeria.

Maize Flour Production and Packaging

Corn Chip Production and Packaging

Garri Processing and Packaging

Rice Milling and Packaging

Baking and Confectionaries Production

Fruit and Citrus Juice Production

Feed Mill Production and Packaging

Palm Kernel Milling and Processing

Potato Chip Processing and Packaging

Plantain Chip Processing and Packaging

Popcorn Production and Packaging

Groundnut Oil Milling and Packaging

Briquette Production

Bottle and Sachet Water Processing Production and Packaging

Candle Production

Oil and Gas Products Blending Plants

Concrete, Bricks, Blocks, Poles and Pillar Production Plant

PVC Manufacturing Plant

LPG cylinders Production, Gas Storing and Filling Plants

Poultry Production

Fishery Industry and Fish Processing


Ice Block Production

Shoe and Leather Processing

Ginger Processing

Soap and Detergent Production

Cosmetics, Cream and Body Lotion Production and Packaging

Particle Board and Caminate Production

Saw Mill

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