SMEDAN Seeks CBN Licence for Microfinance Bank as FG Targets One Million New Small Businesses

The Small and Medium Enterprises Development Agency of Nigeria is seeking a licence from the Central Bank of Nigeria to operate a microfinance bank, a move aimed at strengthening access to affordable credit for small businesses and improving monitoring of government-backed funding across the country.

The Director-General of SMEDAN, Mr Charles Odii, disclosed this in Abuja during a media interaction where he unveiled the agency’s strategic five-point agenda for 2026. According to him, securing a microfinance banking licence would allow SMEDAN to directly disburse funds to micro, small and medium enterprises, enhance transparency and attract increased international development finance into Nigeria’s MSME ecosystem.

Odii revealed that the agency is also engaging the Presidency to expand its business formalisation drive, with plans to register at least 250,000 new businesses in 2026, in addition to pushing for the inclusion of one million more small enterprises nationwide. He explained that the initiative aligns with the Federal Government’s broader goal of bringing informal operators into the formal economy to drive growth, employment and revenue generation.

He stated that 2026 would mark the consolidation of reforms implemented over the past 18 to 24 months, with business formalisation identified as the first major pillar of the agenda. According to him, expanding the number of registered businesses will strengthen Nigeria’s MSME base and improve access to financing, government incentives and structured support.

Beyond registration, the SMEDAN boss announced plans to unveil a revised National MSME Policy in 2026. He explained that the current policy framework, last reviewed in 2021, expires at the end of 2025, making a comprehensive review necessary. Odii stressed that the new policy would be developed through an inclusive and participatory process to ensure it reflects the realities of MSME operators across the 36 states and the Federal Capital Territory, with completion targeted for the first quarter of 2026.

On access to finance, Odii described affordable credit as a core focus of SMEDAN’s 2026 agenda. He disclosed that the agency has negotiated funding of about ₦12 billion to support small businesses nationwide, with loan facilities offered at single-digit interest rates. According to him, most of the loans will be priced at about nine per cent, while the highest rate will not exceed 9.5 per cent, making them among the cheapest financing options available to MSMEs in Nigeria.

He noted that about 500,000 small businesses have already benefited from such funding arrangements, but SMEDAN plans to scale access significantly, targeting between three million and five million MSMEs to better reflect the size and economic importance of the sector.

Capacity building was identified as the fourth pillar of the agency’s strategy, with Odii explaining that many small businesses struggle to access available funds due to weak structures and poor financial records. He said SMEDAN would expand training under its Integrated Capital Support Scheme to help MSMEs become more bankable and better positioned to attract financing from commercial banks and development finance institutions.

According to him, the final pillar of the 2026 agenda focuses on infrastructure development. He said SMEDAN is working with state governments and development partners to replicate industrial hubs across the country, improve access to stable power supply and reduce the overall cost of doing business. Odii linked improved infrastructure directly to job creation, economic stability and national security, stressing that a thriving MSME sector is critical to Nigeria’s long-term growth and development.