Photo: Yetunde Faulkner
The Enterprise Development Centre of Pan-Atlantic University has partnered with Fast Credit to launch a single-digit financing scheme aimed at empowering micro, small, and medium enterprises.
According to a statement on Monday, the initiative was unveiled at an event held in Lagos. The partners said it was designed to address the funding challenges faced by small businesses struggling under high-interest loans.
Acting Managing Director of Fast Credit Finance Company Ltd, Yetunde Faulkner, said the essence of the partnership is to ensure that MSMEs become scalable and sustainable through improved access to affordable finance.
“We are here to engage with EDC’s partners, who are SMEs, and provide them with the opportunity to access single-digit interest-rate financing through Fast Credit. We are offering any amount of loan, starting with N5m, under a partnership with one of our developmental finance partners, BOI, at a flat monthly interest rate of 0.75 per cent, which amounts to nine per cent per annum,” she explained. Faulkner noted that Fast Credit has committed N2bn to the SME financing partnership to help entrepreneurs grow revenues faster than costs and remain sustainable. She added that the loan offering is expected to enable MSMEs to create more jobs, something the Nigerian economy urgently requires
“We will be touching lives and families, and that in itself is one of the goals of Fast Credit: to make a tangible impact in the lives of everyday Nigerians, especially those in Lagos,” she added.
Director of EDC, Dr Nneka Okekearu, described the partnership as a historic step in bridging the funding gap confronting entrepreneurs.
“We have collaborations with several commercial banks, but the double-digit interest rates at which loans are offered have made it tough for entrepreneurs. Today, we are doing something historic. We are signing an agreement with Fast Credit for single-digit loans for our members,” she said.
Okekearu emphasised that access to single-digit credit will significantly boost business productivity.
According to her, manufacturers will be able to expand output, while many MSMEs will create more dignified and fulfilling jobs for young Nigerians as they scale up.
“Someone who previously had just N2m to transact business now has access to N10m, and that means increased production capacity and healthier margins,” she explained.
She disclosed that entrepreneurs within EDC’s network who meet the requirements will be able to access N5m at a single-digit rate of nine per cent per annum.
Executive Director at Fast Credit, Aviomoh Daniel, outlined some of the criteria that finance firms consider before extending loans to MSMEs.
“We look out for business worthiness, profitability and the character of the entrepreneur. Collateral is the last thing any credit firm considers. To be business-credible requires structure, and for security, it is better to register as a limited liability company,” he said.
A business consultant, Feyikemi Odunuga, applauded the collaboration between EDC and Fast Credit for creating easier access to capital for entrepreneurs.
“I feel very good about it. I actually came to represent several of my mentees who always need funding. I will help them put things together so they can access the loan. I am a service provider, so this is particularly important for those in the manufacturing sector,” she said.
An EDC alumnus, Kachi Salvation, also described the initiative as “amazing”, noting that it will benefit a large number of businesses.
“A lot of businesses are going to take advantage of this initiative. They will also train women on how to manage their businesses, and this will be done monthly. The single-digit interest rate is a huge relief for businesses,” he added.
To access the single-digit loan, applicants are required to provide documents including a 12-month bank statement, BVN, NIN, TIN of key directors, company profile, valid identification, passport photograph, and verifiable credit history. Other requirements include a direct debit mandate, a utility bill, guarantor details, and a vendor invoice, as well as collateral valuation and perfection.
