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Access to capital remains one of the biggest obstacles facing Nigerian entrepreneurs and small business owners. Traditional commercial banks often demand collateral — usually in the form of land, buildings, or high-value assets — making loans inaccessible for a large portion of micro, small, and medium enterprises (MSMEs).
However, with the expansion of government-backed initiatives, fintech innovation, and microfinance reforms, it is now possible to obtain business loans in Nigeria without collateral.
This comprehensive guide explores the most reliable sources of such loans in 2025 and beyond, how to qualify, and how to apply.
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TJ News Nigeria can authoritatively report that several institutions now offer collateral-free loans across various sectors, including agriculture, tech, fashion, health, trading, and youth entrepreneurship.
NIRSAL Microfinance Bank (NMFB) – AGSMEIS & TCF Loans
About NMFB
NIRSAL Microfinance Bank is a licensed national microfinance institution created by the Central Bank of Nigeria (CBN) in partnership with NIRSAL Plc, the Bankers’ Committee, and NIPOST. It offers CBN-backed funding to small and medium businesses without demanding collateral.
AGSMEIS Loan
AGSMEIS (Agri-Business/Small and Medium Enterprise Investment Scheme) provides up to ₦10 million at 5%-9% interest per annum without collateral.
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Key Features:
- Loan size: Up to ₦10 million
- Interest: 5% (9% post-COVID rates)
- Tenure: 7 years
- No collateral required
- Sectors: Agriculture, ICT, fashion, retail, etc.
- Requires business plan and EDI (Entrepreneurship Development Institute) training
Application Steps:
- Register and train with an NMFB-accredited EDI
- Submit business plan
- Apply via: agsmeisapp.nmfb.com.ng
- Await vetting, possible site inspection
- Receive disbursement upon approval
Targeted Credit Facility (TCF)
Initially launched during COVID-19, TCF continues as a business support facility.
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Key Features:
- Loan size: ₦250,000 to ₦10 million
- Interest: 5%–9%
- Tenure: 3 years
- No collateral required
- Applicable to households and MSMEs
Application:
- Visit: nmfbloans.nmfb.com.ng
- Select Household or SME category
- Complete form and submit
SMEDAN Loan and Grant Schemes
The Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) partners with banks and development finance institutions to provide MSME support grants and soft loans.
Key Programs:
- SMEDAN/BOA Matching Fund
- ₦500,000 to ₦2.5 million
- No collateral; personal/business guarantees accepted
- Apply via: smedan.gov.ng
- Conditional Grant Scheme (CGS)
- Targeted at micro businesses
- Grant ranges from ₦25,000 to ₦50,000 per beneficiary
- No repayment required (grant)
- One Local Government One Product (OLOP)
- Equipment financing and capacity building for cooperatives
Requirement:
- SMEDAN registration on smedanregister.ng
- CAC certificate and business verification
Bank of Industry (BOI) Youth Entrepreneurship Support (YES) Programme
BOI offers non-collateral loans to young entrepreneurs aged 18–35.
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YES Programme Features:
- Loan amount: ₦500,000 – ₦5 million
- Interest: 5%-9%
- Tenure: 3–5 years
- No traditional collateral (may require guarantors)
Eligibility:
- CAC registration
- Valid business plan
- Training completion (online via BOI portal)
Application:
- Visit: boi.ng/yes
- Complete application
- Upload necessary documents
Development Bank of Nigeria (DBN)
DBN is a wholesale development finance institution that lends through microfinance banks (MFBs) to MSMEs. Although DBN does not lend directly, its partner MFBs offer collateral-free packages for verified businesses.
How It Works:
- Identify a DBN-partnered microfinance bank (e.g., Accion, LAPO, Addosser)
- Apply through the MFB using DBN-backed facility
- Benefit from subsidized interest and flexible terms
LAPO Microfinance Bank
LAPO stands for Lift Above Poverty Organization. It is one of Nigeria’s largest microfinance institutions, serving low-income entrepreneurs, especially women.
Features:
- Loan range: ₦30,000 – ₦5 million
- Interest: 4%–6% monthly (declining balance)
- Tenure: Up to 12 months
- Group guarantee for small loans; higher loans may require basic documents
Application:
- Visit a LAPO branch
- Provide ID, business location verification
- No collateral needed for loans under ₦600,000
Fintech Platforms (Carbon, Branch, FairMoney, Aella, etc.)
Fintechs offer quick access to unsecured loans for small business owners, traders, and individuals.
Comparison:
| Platform | Max Loan | Interest (Monthly) | Tenure | Collateral |
|---|---|---|---|---|
| Carbon | ₦100k–₦1M | 5%–30% | 1–6 months | None |
| Branch | ₦500k | 7%–20% | 1–6 months | None |
| FairMoney | ₦500k | 10%–30% | 1–9 months | None |
Note: Higher risk = higher interest. Ideal for emergency or short-term capital.
Requirements:
- BVN
- Good credit record
- Smartphone
Pay Attention To : Federal Mortgage Bank of Nigeria (FMBN): How to Access NHF Loans
Non-Interest Microfinance Banks (Jaiz, TAJ Bank, etc.)
These institutions offer Islamic-compliant financing (no interest) based on profit-sharing, leasing, or equity partnership.
Products:
- Murabaha (Asset-backed financing)
- Ijara (Lease-to-own equipment)
- Mudarabah (Profit-sharing model)
Requirement:
- CAC certificate
- Business viability
- BVN and KYC documentation
NYSC Business Loan (CBN/NMFB Youth Programme)
For serving corps members and recent graduates with viable business ideas.
Features:
- Up to ₦2 million per person
- No collateral (NYSC certificate and business plan required)
- Tenure: Up to 3 years
- Accessible during or after service year
Cooperative and Cluster-Based Loans
Cooperative societies and market associations offer internal revolving loans without collateral.
How It Works:
- Join a registered cooperative
- Contribute savings over time
- Access pooled funds based on internal rules
Advantages:
- Low interest
- Peer monitoring
- No paperwork delays
State Government SME Schemes
Examples:
- Lagos State Employment Trust Fund (LSETF)
- Up to ₦5 million for SMEs
- 5% interest
- No collateral for micro loans
- Kaduna StartUp Entrepreneurship Programme (KADSTEP)
- Training + funding
- No collateral for loans under ₦500k
- Edo, Kwara, and Ogun State Youth Funds
- Targeted funding for agribusiness, tech, artisans
Summary Comparison Table
| Scheme | Max Loan | Collateral | Target Group | Provider |
|---|---|---|---|---|
| AGSMEIS | ₦10M | No | MSMEs, Startups | NMFB/CBN |
| SMEDAN Matching Fund | ₦2.5M | No | Small Businesses | SMEDAN/BOA |
| BOI YES | ₦5M | No | Youth Entrepreneurs | BOI |
| DBN Loans via MFBs | Varies | Maybe | SMEs & Traders | DBN + MFBs |
| LAPO MFB | ₦5M | No | Traders, Artisans | LAPO |
| Fintech Apps | ₦1M | No | Individuals, MSMEs | Carbon, Branch, etc. |
| NYSC Loans | ₦2M | No | Corps Members | NMFB/CBN |
| LSETF | ₦5M | No | Lagos SMEs | Lagos State Govt |
Final Tips to Qualify for a Loan Without Collateral
- Register your business with CAC
- Prepare a strong, realistic business plan
- Open a business account and maintain cash flow
- Avoid loan scams demanding “processing fees”
- Monitor your credit profile linked to your BVN
TJ News Nigeria advises all applicants to verify any platform or agent through official websites and avoid third-party agents promising guaranteed approval.
For more information, follow TJ News Nigeria’s ongoing coverage of SME financing, CBN loan alerts, and entrepreneurship tips.
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