Ebonyi State Government Launches Digital Loan Portal Expanding MSME Access to Finance
In Nigeria, a digital loan/e-wallet portal launched by the Government of Ebonyi State on June 7, 2021, is now strengthening access to finance for micro, small, and medium enterprises (MSMEs), including agribusinesses, addressing funding constraints and improving access to financial resources for entrepreneurs across the State.
In continuous discussion with the Ebonyi State Government’s Ministry of Commerce, Industry, and Business Development, over the past year, the USAID-funded Feed the Future Nigeria Agribusiness Investment Activity, implemented by Cultivating New Frontiers in Agriculture (CNFA), designed and developed a digital loan portal with a connected e-wallet system. That portal has now been launched by the Ebonyi State Government’s Ministry of Commerce, Industry, and Business Development to serve as the hub for the delivery and coordination of their MSME Development Funds.
The MSME Development Funds are a collection of federal government and private-sector-driven loan and grant initiatives targeting eligible MSMEs to cushion the economic impact of the COVID-19 pandemic on businesses. This new user-friendly online portal and its integrated e-wallet, which serves to facilitate loan payments in Ebonyi State, is the first of several initiatives the Activity is engaged with to deploy ICT solutions that seamlessly manage the aggregation, documentation, and disbursement of MSME funds at the State level. The portal also enables the State Government to oversee loan utilization and recovery in collaboration with key financial institutions, including Zenith Bank, First Bank, and United Bank for Africa. Aligned with the Activity’s focal value chains, 50% of the MSME Development Fund is targeted at agribusiness MSMEs in the aquaculture, cowpea, maize, rice, and soybean value chains.
The Ebonyi State Government is now piloting the use of the portal and has so far used it to disburse loans worth $169,427 (69.4 million NGN) to 609 rice farmers. These loans are supported by the World Bank’s FADAMA project through Ebonyi State’s Nigeria COVID-19 Action Recovery and Economic Stimulus (NG CARES) Program for Results. The NG CARES Fund is a World Bank initiative executed by the Nigerian Bank of Industry (BOI) that launched in September 2021 to provide state-level financing through targeted interventions in the form of subsidized loans, business, and employment grants to support businesses.
An additional 392 farmers supported by the Activity will receive loans worth $109,086 (44.7 million NGN) upon completing their registration and verification via the portal.
With the loan portal and e-wallet now online, at least 6,000 MSMEs in Ebonyi will have access to NG CARES funds worth at least $14,642,360 (six billion NGN) over the coming months. The portal also presents Ebonyi State with a unique opportunity to leverage BOI’s microcredit platform, which will allow them to deliver more grants and loans to businesses in the state, providing targeted relief, restoring livelihoods, and stimulating economic recovery for vulnerable households and MSMEs in the State as a result of COVID-19.
“The loan portal has and is going to open up a lot of opportunities for our state,” said Dr. Stephen Odo, Commissioner for Commerce, Industry, and Business Development, Ebonyi state, noting that it will further the state government’s drive to stimulate economic growth and job creation. “We are now looking at integrating all running agribusiness and MSME loans in the state for ease of management and recovery.”
As the Ebonyi State Government drives the growth and development of MSMEs, the Feed the Future Nigeria Agribusiness Investment Activity will continue to support the government to make financial processes less cumbersome and to expand access to financial services for agribusiness MSMEs across its value chains, increasing long-term agriculture sector development and food security in the state.
