The Agege Local Government Area has partnered with the Lagos State Employment Trust Fund to launch a new loan scheme offering up to N1 million to small businesses and startups operating within the council area.
Unveiled by Agege LGA Chairman Abdulganiyu Obasa, the programme carries a nine per cent annual interest rate — significantly below the commercial lending rates currently available to most Nigerian SMEs — and forms part of a broader push to lift residents out of poverty and create jobs at the grassroots level.
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How the scheme works
The programme is open to both startups and existing small businesses registered within Agege, with loans disbursed and supervised by the LSETF to ensure funds are deployed appropriately and repayments begin on schedule. Obasa confirmed that the rollout has already commenced, with 10 beneficiaries each receiving N500,000, while approximately 25 additional applications are under review.
Of the more than 130 people who applied during the initial phase, 52 applications were declined due to poor credit history — a rejection rate that underscores the importance of maintaining clean financial records and formal business documentation before approaching any structured lending programme.
At nine per cent per annum, this loan scheme costs a fraction of what most Nigerian SMEs pay for commercial credit. The difference between nine per cent and thirty per cent on a N1 million loan is not a rounding error — it is the difference between a business that can grow and one that is perpetually servicing debt.
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Beyond the loans
Agege LGA has also invested in the upgrade of several skill acquisition centres across the community, covering fashion, beauty, leather works, technology, photography, and drone operations. Obasa stressed that equipping young people with practical, income-generating skills is essential as traditional employment can no longer absorb Nigeria’s rapidly growing labour force.
The LSETF involvement ensures that beneficiaries receive more than just funding. The fund provides structured hand-holding throughout the loan period, including monitoring of how funds are used and ensuring repayment timelines are met — a model that strengthens accountability and improves the likelihood that the scheme delivers sustained impact rather than one-off disbursements.
What it means for community-level SMEs
Grassroots financing at this scale and cost is rare in Nigeria. While development finance institutions and federal programmes exist, they often struggle to reach the smallest businesses operating at the local government level. The Agege scheme, structured around an existing LSETF framework with local government buy-in, represents a more direct and accessible pathway to affordable credit for entrepreneurs who are rarely the target of larger institutional programmes.
If replicated across other local government areas in Lagos and beyond, this model could meaningfully extend affordable financing to a segment of the SME population that national-level interventions consistently fail to reach.
