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Experts have highlighted a widening range of non-bank financing options designed to help small businesses overcome long-standing barriers to traditional bank loans.
The experts noted that the future of SME funding in Nigeria will depend less on traditional bank loans and more on alternative financing ecosystems, including crowdfunding, credit guarantees, factoring, leasing, venture capital and targeted government funds.
They made these submissions while speaking at the 2025 BusinessDay SME Conference and Awards in Lagos, themed ‘Driving Nigeria’s Economy, Empowering SMEs for Global Competitiveness.’
Femi Egbesola, national president of the Association of Small Business Owners of Nigeria (ASBON), emphasised that government-backed platforms and emerging private-sector mechanisms now offer easier and more flexible funding than commercial banks.
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He stated that crowdfunding, factoring, and credit guarantees are alternatives, noting that SEC-approved crowdfunding platforms allow businesses to raise capital from multiple investors without heavy documentation or high interest rates.
The NSE Growth Board enables limited liability companies not only public companies to attract global investment. The National Credit Guarantee Company, launched this year to guarantee up to 70 percent of SME loans, eliminating the need for landed collateral.
There are also factoring companies, which pay suppliers immediately after invoicing large buyers, preventing long cash-flow delays of 30–90 days.
He noted that there is an expanding market for leasing services, making it possible for small businesses to acquire machinery and equipment with long-term payment plans.
“These options are easier and more cost-effective than bank loans,” Egbesola said, noting that many SMEs still remain unaware of them.
He added that targeted national programmes such as the Rural Area Investment Fund (RAPIJO), Women GLOBE Loan, the Youth Entrepreneurship Fund, and the newly launched Agri-Fund provide single-digit interest loans for specific business categories, a stark contrast to commercial bank rates.
Beyond funding, the government is also promoting export-readiness through the African Continental Free Trade Area (AfCFTA) support scheme, the National Single Window platform for easier documentation, and free Business Integrity Certification available until March 2025.
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Egbesola urged SMEs to leverage these tools and to take trademark protection, technology adoption and business structuring seriously to succeed globally.
Experts also noted that bank loans are still unreachable for most SMEs
During the panel session, experts reinforced the need for alternative financing, stressing that bank loans remain out of reach for most small businesses.
Comfort Osemwegie, chief deal maker at Dealroom Nigeria, argued that the current system demands collateral and documentation many SMEs cannot provide.
“Small businesses can’t access Bank of Industry funds because they don’t meet collateral requirements. What they need is more patient capital—angel investment, venture debt, and equity support,” she said.
She noted that venture debt, in particular, provides a middle ground for startups and small enterprises before they are ready to give up equity.
Emmanuel Olujobi, founder of Jasper School of Data (UK), highlighted Nigeria’s weak data infrastructure as a major constraint on SME finance.
“In the UK, access to reliable business data unlocks funding. Nigeria must decentralise information so investors can assess risk,” he stated.
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Paul Olaloye, head of audit and compliance at IBILE Microfinance Bank, said poor transparency among SMEs contributes to their inability to access formal loans.
“Many medium-sized enterprises do not keep proper records, so their credit performance cannot be assessed. Policy reforms alone won’t work without better data and financial reporting,” he said.
He called on the government to deepen credit guarantee schemes and ramp up public awareness so SMEs can understand available options.
Zebulon Agomuo, editor, BD Sunday, representing Frank Aigbogun, publisher, BusinessDay, noted that empowering SMEs is essential to building a globally competitive Nigerian economy.
