The Micro, Small, and Medium Enterprises Development Fund (MSMEDF) is a Central Bank of Nigeria (CBN) initiative to encourage financial inclusion and improve the Nigerian small-scale business sector. In 2013, the fund offers low-interest loans as well as grant aid for MSMEs across the country, with a particular focus on youth, women, and rural entrepreneurs.
In 2025, MSMEDF is still one of the most easily accessible CBN intervention programs available to small-sized entrepreneurs. It aids entrepreneurs in expanding their operations, boosting productivity, and creating jobs. This guide will explain how to access to the MSME Development Fund, including who can apply for the MSME Development Fund, who may apply, the documents required, and the step-by-step procedure to get financing.
What is the MSME Development Fund in Nigeria?
The MSME Development Fund (MSMEDF) is a financing scheme created in the Central Bank of Nigeria (CBN) to support small, micro, and medium-sized enterprises. Its goal is to increase access to low-cost financing for businesses that contribute to economic growth but are struggling to access loans from banks that are commercial.
The total amount is estimated at more than N220 billion, and 60 per cent of the fund is allocated for women-owned businesses. The remainder is targeted at youth entrepreneurs, artisans, and farmers, as well as service-based microbusinesses.
The funds are distributed through financial institutions participating in the program (PFIs), such as cooperative societies, microfinance institutions, and development finance organisations. These intermediaries manage loans, evaluate business proposals, and distribute money to eligible beneficiaries.
The information may differ based on programme phase. Verify information with an official CBN or other bank portal prior to submitting an application.
Funding & Coverage of MSME Development Fund
The MSMEDF provides both grant and loan components dependent on the type of loan and the target group.
The key features are:
- Amount of Loan: N500,000 to N5 million for groups or individuals.
- The interest rate: a maximum of 9 percent per year.
- Duration: 1 – 5 years based on the nature of the business
- Collateral is flexible or free for micro-sized businesses.
- The target sectors are agriculture, manufacturing trade, ICT and creative industries.
Comparison of MSMEDF Loan and Grant Components
| Category | Type | Maximum Amount | Interest Rate | Target Beneficiaries |
| Micro Enterprises | Loan | ₦500,000 – ₦1 million | 9% | Traders, artisans, small farmers |
| Small & Medium Enterprises | Loan | ₦2 million – ₦5 million | 9% | Manufacturers, service providers |
| Women-Owned Businesses | Grant/Loan mix | ₦1 million – ₦5 million | 0%–9% | Female entrepreneurs |
| Youth Enterprises | Loan | ₦500,000 – ₦3 million | 9% | Youths aged 18–35 years |
| NGOs & Cooperatives | Institutional loan | ₦5 million+ | Negotiable | Cooperatives and community groups |
Eligibility for MSME Development Fund
The applicant must meet certain requirements to be eligible for the MSMEDF.
General requirements are:
- You must be a Nigerian resident or a registered company that is operating in Nigeria.
- Develop a feasible business plan or a proposal.
- Operate within sectoral areas that are eligible to be that are supported by the fund
- You must have a Bank Verification Number (BVN) and valid identity.
- Register with the Corporate Affairs Commission (CAC) (for SMEs)
- You must be a member of a co-operative society or a business organisation (for micro-entrepreneurs).
- Keep the account at a financial institution
Particular preference is given to:
- Women entrepreneurs (60% allocation)
- Youth-owned companies
- Agro-based companies
- Rural microenterprises
List of Participating Financial Institutions for MSMEDF (2025)
| Institution Type | Examples | Role in MSMEDF |
| Microfinance Banks | NIRSAL MFB, LAPO MFB, AB MFB | Receive and process applications |
| Commercial Banks | Access Bank, UBA, Zenith Bank | Offer SME loans via CBN fund |
| Development Banks | Bank of Industry (BOI), Bank of Agriculture (BOA) | Provide large-scale funding and monitoring |
| Cooperatives & NGOs | Registered rural and women cooperatives | Facilitate group lending and repayment |
How to Access MSME Development Funds in Nigeria
- Locate a Participating organisation. Go to or call any authorised microfinance institution, cooperative society, or development finance organisation mentioned above.
- Confirm eligibility – Discuss your business plan with the institution to ensure that it is in line with MSMEDF specifications.
- Create the Business Plan It should clearly define your goals for business along with financial projections, as well as anticipated effects.
- Apply for Your Job Complete the MSMEDF application form, and include all the required documents.
- Participate in screening or training Certain institutions might conduct an interview or training for entrepreneurs.
- The documents are awaiting review and approval. The documents you submit will be reviewed before being sent to CBN to confirm.
- Receiving Disbursement If it is accepted, funds will be credited to your company account on the agreed terms.
Required Documents for the MSME Development Fund Application
- A valid method to prove identity (National ID, voter’s card, ID card, international passport)
- Certificate of registration for business (CAC)
- Tax Identification Number (TIN)
- Bank Verification Number (BVN)
- A feasibility or business plan
- Address proof (utility invoice)
- Two passport photographs
- Member certificate (for association or cooperatives)
Timelines
- Application processing: 2–6 weeks, depending on the institution’s workload.
- Approval and payment: 4-8 weeks after confirmation
- Monitoring regular follow-up from the lending institution throughout the loan term
Common Challenges or Warnings
- Avoid fraudulent agents or intermediaries who promise faster approval for the payment of a fee.
- CBN does not charge any application or registration fees. CBN does not charge application or registration fees.
- Incomplete documentation is a primary reason for rejection of an application.
- Be sure that you are ensuring that your company’s plan of action is based on reality and measurable.
- In the event of defaults in repayment, it could affect the eligibility of future programs.
FAQs on Accessing MSME Development Funds
1. Who manages the MSME Development Fund?
The fund is managed by the Central Bank of Nigeria through participating financial institutions.
2. Is the MSMEDF a grant or a loan?
It includes both grants and soft loans, depending on the category of the beneficiary.
3. What is the interest rate?
Interest is capped at 9% per annum for most loans.
4. Do I need collateral?
Collateral requirements are flexible; some loans may only need guarantors.
5. Can startups apply?
Yes, provided they have a feasible business plan and meet other eligibility criteria.
6. How much can I access?
Between ₦500,000 and ₦5 million depending on the business size and proposal.
7. Are women prioritized?
Yes, 60% of the fund is reserved for women-owned enterprises.
8. How long does approval take?
Usually between 2 to 8 weeks, depending on the institution.
9. Can I apply online?
Applications are made through participating banks or cooperatives, though some institutions accept online submissions.
10. What happens if I default?
Defaulters may lose access to future funding and face legal recovery actions.
11. Can rural entrepreneurs apply?
Yes, rural and agricultural businesses are priority groups.
12. Where can I check my loan status?
Through the institution where you submitted your application.
Conclusion
Accessing the MSME Development Fund is one of the most practical ways to grow your small business in Nigeria. By applying through approved financial institutions, submitting proper documentation, and maintaining repayment discipline, entrepreneurs can benefit from affordable financing to expand operations and create jobs.
Always verify the authenticity of your bank or cooperative before applying and stay informed through official CBN updates.
Disclaimer: FederalGrantsInfo.com provides verified information for educational purposes only. We do not distribute grants or charge any application fees. Always confirm current details through official portals.