The Nigerian Youth Investment Fund (NYIF) loan is a government-sponsored initiative that provides low-interest loans to Nigerian youths to start, grow, or expand their businesses. The NYIF was started in 2020 by the Buhari Administration in response to the high unemployment rate among Nigerian youth.
The first take-off seed money for the NYIF, which aspires to financially empower Nigerian youth to create at least 500,000 employment between 2020 and 2023, is N12.5 billion. The Federal Ministry of Youth and Sports Development will organise or authorise a mandatory entrepreneurship course for applicants, and the NIRSAL Micronance Bank (NMFB) is the Participating Financial Institution (PFI) for the programme amongst all Nigerian Banks.
Why Was The NYIFLoan Created?
The Central Bank of Nigeria (CBN) has published the Framework for the Operation of the Nigeria Youth Investment Fund as part of its initiative to increase access to finance for youth and youth-owned businesses for national development, create desperately needed employment opportunities to quell youth unrest, improve the managerial capacity of the youth, and develop their potential to become future large corporate organisations.
What Are The Benefits Of The NYIF Loan?
What Are The Eligible Business Activities For The Nigerian Youth Investment Fund (NYIF) loan?
The Nigerian Youth Investment Fund (NYIF) loan supports a range of legally permitted activities within the specified sectors or focal areas, including:
- Technology/Innovation
- Agriculture and Related Value Chain
- Green Economy and Renewable Energy Sector
- Manufacturing
- Hospitality/Tourism
- Construction
- Logistics and Supply Chain
- Healthcare Value Chain
- Creative Sector
- Trading and Services
- Others (as determined by NYIF/CBN from time to time)
What Are The Types Of Loan Facilities Available To Applicants?
The types of loan facilities available to applicants of the NYIF loan are:
1. Term Loan (for Asset Acquisition/Improvement)
Individual (Unregistered Business): The loan amount for unregistered businesses will be determined based on the activity and nature of the project, with a maximum limit of N250,000.
2. Registered Businesses (Business Name, Limited Liability, Cooperative, Commodity Association)
The loan amount for registered businesses will also be determined by the activity and nature of the project, with a maximum limit of N3.0 million, including working capital.
It is important to note that Immovable assets acquired with the loan must be registered with the National Collateral Registry (NCR).
Read Also: 9Credit Loan – Types & How to Apply
Who Is Eligible For The NYIF Loan?
Nigerian youths between the ages of 18 and 35 are eligible for the loan as this age group is considered the youth demographic and is the target for this youth-focused investment initiative. But with this criteria comes others which include:
1. Official Government Identification
Applicants of the Nigeria Youth Investment Fund (NYIF) loan are required to possess a valid government-issued identification document, such as a National Identity Card, International Passport, or Driver’s License. This ensures that the government can verify the identity of the applicant.
2. Notarized Guarantor Forms
Applicants need to submit notarized guarantor forms, which are legal documents signed by individuals who agree to take responsibility for the repayment of the loan in case the borrower defaults. This provides an additional layer of assurance for the lending institution.
3. Passport Photographs
Submission of recent passport-sized photographs is required for identification and documentation purposes. These photographs help in creating a comprehensive profile of the applicant.
4. Bank Verification Number (BVN)
The BVN is a unique identifier linked to an individual’s bank account. It is crucial for financial transactions and helps in verifying the financial history and standing of the applicant. This ensures transparency and facilitates the disbursement of funds to the correct bank account.
5. Training Certificate
Applicants are required to provide evidence of training related to entrepreneurship or business management. This certificate serves as an indicator that the applicant has acquired the necessary skills and knowledge to manage and grow a business successfully.
6. Fundable Business Idea
A key criterion is the submission of a viable and fundable business idea. This involves providing a detailed business plan that outlines the nature of the business, market analysis, financial projections, and a clear strategy for sustainability.
7. Registered Business
The business proposed by the applicant should be legally registered under the Corporate Affairs Commission (CAC). This ensures that the business operates within the legal framework and can benefit from various government incentives and protections.
8. Nigerian Citizenship
Only Nigerian citizens are eligible for the NYIF loan. This criterion ensures that the funds are directed towards supporting the economic growth and development of the country.
9. NYSC Certificate for Graduates
Graduates who have completed the mandatory National Youth Service Corps (NYSC) program are required to provide their NYSC certificate. This serves as proof of completion of the compulsory national service and is an additional qualification for eligibility.
10. No Conviction of Financial Crime in the Last 10 Years
A crucial eligibility criterion is that the applicant should not have been convicted of any financial crime in the past 10 years. This emphasizes the importance of ethical and lawful financial practices, ensuring that the funds are allocated to individuals with a clean financial record.
11. Possession of Local Government Indigene Certificate
Applicants are required to possess a Local Government Indigene Certificate. This certificate serves as proof of the applicant’s origin or residence in a particular local government area. It helps in ensuring that the benefits of the NYIF are distributed among youths across various localities in Nigeria.
Meeting these eligibility criteria helps ensure that the NYIF funds are directed towards individuals who are committed, well-prepared, and have the potential to contribute significantly to the Nigerian economy through their entrepreneurial endeavours.
How Do You Apply For The NYIF Loan?
There are a few procedures you need to follow to apply for the Nigerian Youth Investment Fund (NYIF) loan. They include:
1. Identification of Training/Mentoring Needs
The first part of the procedure involves the Federal Ministry of Youth and Sports Development (FMYSD) collaborating with relevant stakeholders to identify the training and mentoring needs of potential applicants. This step ensures that the youth are adequately prepared for entrepreneurship and have the necessary skills and knowledge to manage a business successfully.
2. Screening Process
Youth applicants will then have to undergo a screening process to assess their eligibility and suitability for the NYIF loan. This screening includes a review of documents, background checks, and other relevant assessments. Additionally, applicants may be required to undergo mandatory training sessions to enhance their entrepreneurial skills if it is found out that they are lacking in some aspects.
3. Accessing the Application Portal
Eligible and duly screened youth applicants are advised to log on to the portal provided by the Nigeria Youth Investment Fund (NYIF) through the Nigeria Microfinance Bank (NMFB) online platform: www.nyif.nmfb.com.ng. This online platform serves as the gateway for applicants to submit their loan applications and supporting documents. The spaces you need to fill include:
- First Name
- Middle Name
- Surname (Last Name)
- BVN
- Date of Birth
- Email address
- Phone
- Gender
- Residential Address
- Geo-Political Zone
- State of Origin
- LGA
- Educational Level (Primary, Secondary & Tertiary)
4. Application Submission
Applicants submit their loan applications through the NMFB portal after providing detailed information about the business idea, personal details, financial projections, and any other documentation required by the NMFB.
5. Appraisal of Applications
The NMFB conducts a thorough appraisal of the submitted applications. This involves assessing the viability of the business ideas, the financial soundness of the applicants, and the overall feasibility of the proposed ventures.
6. Request for Funds Release
Upon a satisfactory appraisal of the applications, the NMFB takes the necessary steps to apply for the release of funds in respect of the approved individuals or enterprises from the NYIF and the Central Bank of Nigeria (CBN). This involves complying with the established procedures for fund disbursement.
7. Credit Checks
The NMFB conducts credit checks on the applicants to evaluate their creditworthiness. This involves assessing the financial history and credibility of the individuals applying for the loan. The credit check is a standard procedure to ensure responsible lending practices and minimize the risk of default.
8. Notification of Approval
Successful applicants are notified of the approval of their loan. This notification includes details about the approved loan amount, terms and conditions, and any other relevant information.
9. Disbursement of Funds
Upon approval, the funds are disbursed to the successful applicants. The funds are intended to support the establishment or growth of their businesses.
By following this comprehensive application procedure, the NYIF aims to ensure that the loan is granted to deserving and well-prepared individuals, fostering entrepreneurship and economic development among the youth in Nigeria.
What Is The Loan Tenor of The Nigerian Youth Investment Fund (NYIF) Loan?
The maximum loan tenor for the Nigerian Youth Investment Fund (NYIF) loan is 5 years. This extended period allows for flexibility in repayment, considering the varying nature and timelines of businesses across different sectors.
What Is The Moratorium Of The Nigerian Youth Investment Fund (NYIF) Loan?
A moratorium is a grace period during which the borrower is not required to make principal repayments. NYIF, applicants are provided with a moratorium period of up to 12 months. This means that borrowers have a grace period before they commence the repayment of the principal amount, allowing them some time to establish and stabilize their businesses before the financial commitment begins.
What Is The Repayment Structure Of The Nigerian Youth Investment Fund (NYIF) Loan?
The repayment structure of the NYIF loan is designed to align with the cash flow and operational dynamics of the businesses. Repayments are structured on an instalment basis, implying that borrowers will pay back the loan in periodic instalments rather than as a lump sum. This approach is more manageable for businesses, especially those in the startup phase or with varying revenue streams.
The repayment structure is also aligned with the evaluation conducted by the Nigeria Microfinance Bank (NMFB).
What Are The Benefits Of Taking The Nigerian Youth Investment Fund (NYIF) Loan?
The following are some of the benefits of taking the Nigerian Youth Investment Fund (NYIF) Loan:
1. Low Interest Rate
The NYIF loan’s low-interest rate reduces the overall cost of borrowing for the recipients, making the funds more accessible and affordable. This feature is particularly beneficial for young entrepreneurs who may be starting businesses with limited capital.
2. Collateral-Free
The NYIF offers a collateral-free borrowing experience. This means that applicants do not need to provide physical assets or personal property as security for the loan. This significantly lowers the barriers to entry for young entrepreneurs who might not have substantial assets to use as collateral. The NMFB will leverage the General Standing Instruction (GSI) as collateral. This means indebted applicants will have the system debit their account in another bank to recover the defaulted loan
What Are The Challenges Of Taking The Nigerian Youth Investment Fund (NYIF) Loan
The following are some of the challenges of taking the Nigerian Youth Investment Fund (NYIF) Loan:
1. Numerous Documentation Required
One of the challenges associated with the NYIF loan is the requirement for numerous documentation. The application process involves submitting a range of documents, including business plans, identification documents, training certificates, and other relevant paperwork. While documentation is necessary for due diligence and risk assessment, the extensive paperwork might be perceived as burdensome and time-consuming for some applicants.
2. Only Existing Viable Businesses Are Required
The NYIF places an emphasis on supporting existing viable businesses. While this ensures that the funds are directed towards enterprises with a demonstrated potential for success, it may pose a challenge for young entrepreneurs who are in the early stages of starting their businesses. This criterion may exclude individuals who have innovative ideas but lack a track record of an established business.
In Conclusion
The NYIF loan is a great opportunity for Nigerian youth to start or grow their businesses. It is a low-interest loan with flexible repayment terms. If you are interested in applying for the NYIF loan, it is important to make sure that you meet all of the eligibility criteria, including these two requirements. You can find more information about the NYIF loan on the program’s website highlighted in the article, good luck.
