Jaiz Bank Unveils Collateral-Free Financing for SMEs to Boost Business Growth

Access to finance has long been one of the biggest obstacles facing Nigerian entrepreneurs. For many small businesses, securing a loan often comes down to one challenge—providing collateral.

That could soon change.

Jaiz Bank Plc has announced plans to introduce collateral-free financing solution specifically for Micro, Small and Medium Enterprises (MSMEs), a move that could make business financing more accessible for thousands of entrepreneurs across Nigeria.

The proposed financing product, which is currently awaiting approval from the Central Bank of Nigeria (CBN), will adopt a cash-flow lending model that evaluates businesses based on their financial performance rather than physical assets.

For many business owners, this could mean less stress over collateral and more opportunities to access the funding needed to grow.

A New Approach to SME Financing

Traditional business loans often require borrowers to provide landed property or other valuable assets as collateral before financing can be approved.

Jaiz Bank wants to take a different route.

Instead of focusing on physical assets, the bank plans to assess businesses using their cash flow and transaction history. This means entrepreneurs with healthy business records may qualify for financing based on how their businesses perform rather than what they own.

To reduce lending risks, the bank also intends to use tools such as loan guarantees and Global Standing Instruction (GSI) mandates instead of relying solely on conventional collateral.

For many entrepreneurs, this approach could remove one of the biggest barriers to accessing formal finance.

Why This Matters for Nigerian SMEs

Across Nigeria, many promising businesses struggle to expand because they cannot meet strict collateral requirements imposed by financial institutions.

Without access to working capital, businesses often find it difficult to:

• Increase production
• Purchase inventory
• Buy equipment
• Hire additional staff
• Expand into new markets

A financing model based on cash flow could make it easier for viable businesses to access the support they need.

As many entrepreneurs would say, “If your business dey perform well, e suppose count too—not just the property wey you get.”

Digital Financing at Your Fingertips

Jaiz Bank also plans to make the financing process more convenient by digitising loan applications.

Once launched, eligible customers will be able to apply for financing directly from their mobile devices without visiting a physical branch.

The bank believes this digital approach will:

• Reduce application processing time.
• Improve customer convenience.
• Expand access to financing across Nigeria.
• Reach entrepreneurs in underserved communities.

For business owners constantly on the move, being able to complete financing applications online could save valuable time and simplify the borrowing process.

More Support for Agriculture, Manufacturing and SMEs

v collateral-free financing initiative forms part of Jaiz Bank’s broader strategy to increase support for key sectors of Nigeria’s economy.

The bank plans to expand financing across areas such as:

• Agriculture
• Manufacturing
• Export trade
• Renewable energy
• Food security
• Agricultural value chains
• Alternative energy solutions

These sectors remain critical to Nigeria’s economic growth and job creation, making access to finance even more important.

Strengthening the Bank for Future Growth

Alongside the new SME financing initiative, Jaiz Bank has announced plans to raise ₦150 billion in additional capital, subject to regulatory approvals.

The capital raise is expected to take place in phases between July and September and will strengthen the bank’s ability to finance larger projects while supporting future expansion.

The additional funds are expected to improve the bank’s lending capacity and create more financing opportunities for businesses across different industries.

Strong Financial Performance Supports Expansion

Despite challenging economic conditions, Jaiz Bank continues to record steady growth.

According to the bank:

• Total assets increased by approximately 19% to nearly ₦1.3 trillion.
• Customer deposits grew by over 24% to more than ₦1.12 trillion.
• Profit Before Tax rose by 28% to ₦31.24 billion.

To improve operational efficiency, the bank is also adopting cost-saving initiatives such as off-grid energy solutions for selected branches and plans to introduce electric vehicles into its operations.

Expanding Across Nigeria and Beyond

Jaiz Bank currently operates 55 branches across 26 states and plans to open 10 additional branches before the end of the year.

The bank aims to establish a presence in every state capital within the next two years while also exploring expansion opportunities outside Nigeria over the next five years.

This growth strategy reflects the bank’s ambition to strengthen its position as one of Nigeria’s leading non-interest financial institutions.

What This Means for Nigerian Entrepreneurs

If approved by the Central Bank of Nigeria, the proposed financing solution could significantly improve access to business capital for entrepreneurs who have struggled to qualify for traditional loans.

Whether you’re running a fashion business, food processing company, agribusiness, manufacturing outfit, or tech startup, easier access to financing can help you:

• Purchase equipment
• Restock inventory
• Expand operations
• Improve productivity
• Employ more workers
• Scale your business sustainably

For many SMEs, this initiative could provide the financial boost needed to move from survival mode to sustainable growth.

Final Thoughts

Jaiz Bank’s proposed collateral-free financing model represents a promising step towards improving financial inclusion for Nigeria’s small businesses.

By focusing on business performance instead of physical assets, the initiative has the potential to unlock funding opportunities for thousands of entrepreneurs who have previously been excluded from formal credit.

If approved, the programme could reshape how many Nigerian SMEs access financing and encourage more businesses to participate in the formal financial system.

At SefrelShop, we’ll continue bringing you verified updates on grants, funding opportunities, financial programmes, and business resources that help entrepreneurs build stronger and more successful businesses.

Frequently Asked Questions (FAQs)

What is Jaiz Bank’s new SME financing initiative?

It is a proposed collateral-free financing solution that will assess businesses based on their cash flow instead of requiring traditional collateral.

Has the financing product been launched?

Not yet. The product is awaiting approval from the Central Bank of Nigeria before it becomes available.

Who can benefit from the financing?

The initiative is designed for Micro, Small and Medium Enterprises (MSMEs) looking for business funding to grow and expand.

How will businesses be assessed?

Jaiz Bank plans to evaluate applicants using their transaction history and cash flow records, alongside other risk management measures such as loan guarantees and Global Standing Instructions (GSI).

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