In what may become a catalytic breakthrough for Nigeria’s beleaguered SME sector, the Lagos State Government is poised to ink a Memorandum of Understanding (MoU) with the Bank of Industry (BoI) and Sterling Bank Plc to improve financial access for small and medium-scale enterprises (SMEs). The move signals a bold new phase of blended public-private sector collaboration aimed at addressing one of the most entrenched barriers to business growth in Nigeria: affordable credit.
The Commissioner for Commerce, Cooperatives, Trade and Investment, Mrs. Folashade Ambrose-Medebem, announced this in Lagos on Monday, revealing that the MoU will be signed on May 7 at the Adeyemi Bero Hall, Alausa Secretariat, as part of the launch of a pioneering initiative titled “Lagos State Access to Finance for SMEs through Co-operatives” (LASMECO).
A Game-Changing SME Finance Model
LASMECO, positioned as a first-of-its-kind financing platform, is designed to deliver risk-mitigated, low-interest loans of up to ₦10 million at just 9% interest over two to three years—a rare offering in Nigeria’s notoriously high-interest loan market. Even more remarkable is the non-collateralised structure of the loans, which removes one of the biggest obstacles faced by micro and small business owners seeking funding.
Crucially, Sterling Bank Plc will guarantee 50% of the loans, drastically lowering the perceived risk for lending institutions and paving the way for a more inclusive credit ecosystem.
According to Ambrose-Medebem, the initiative targets SMEs operating in strategic sectors such as:
- Healthcare
- Agriculture
- Creative Industries
- Manufacturing
- Circular Economy Clusters
Context: Why This Matters Now
Access to finance has long been the Achilles’ heel of Nigeria’s SME landscape, despite SMEs contributing over 48% to national GDP and employing more than 80% of the workforce, according to data from the Nigerian Bureau of Statistics (NBS). Traditional lenders often require excessive collateral, impose high interest rates, and lack a nuanced understanding of sector-specific risks, leaving most SMEs excluded from formal credit systems.
By leveraging cooperatives as financing conduits and partnering with BoI and a digitally savvy commercial bank like Sterling, LASMECO represents a progressive model that blends development finance with scalable financial technology and community trust.
Political and Institutional Will
The project, backed by Governor Babajide Sanwo-Olu, comes at a critical time when Lagos is repositioning itself as the SME capital of West Africa. The planned launch will attract high-level dignitaries including:
- Dr. Olasupo Olusi, Managing Director, Bank of Industry
- Mr. Abubakar Suleiman, Managing Director, Sterling Bank Plc
- Dr. Francis Meshioye, President, Manufacturers Association of Nigeria (MAN)
- Mr. Gabriel Idahosa, President, Lagos Chamber of Commerce and Industry (LCCI)
Their presence is expected to signal investor confidence and underscore the cross-sector commitment needed to transform SME financing in Nigeria.
Strategic Implications for the Economy
For businesses, this means a new era of accessible capital to scale operations, increase employment, and drive value-chain development across key sectors. For Lagos State, it’s a demonstration of economic leadership—showing how innovative public-private collaboration can solve systemic challenges.
If executed with rigour and transparency, LASMECO could serve as a national template for democratizing finance, accelerating growth, and deepening financial inclusion in the informal and SME segments.
BRANDECONOMY will be on ground at the LASMECO launch to bring you exclusive insights, stakeholder reactions, and future projections.
