Given that self-employment is one of the greatest routes to financial independence, many Nigerians today opt for the self-employed lifestyle. The emergence of freelancers, the existence of artisans, and the presence of investors indicate that self-employment is becoming the norm. Due to the instability of your income guarantee, it may be necessary for you to obtain a Self-employed loan in Nigeria in such a situation.

This article provides a general overview of self-employed loans in Nigeria and includes all pertinent information.

Who is a self-employed person?

This is a person who does not work for any particular employer. Therefore, he or she is not paid on a consistent or regular basis. As a self-employed individual, you engage in direct business transactions and earn income from them. Frequently, the employer does not withhold taxes, so it is your responsibility to do so.

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As a self-employed individual, you may engage in a variety of occupations, although you are highly competent and specialize in one.

What are self-employed loans in Nigeria?

Self-employed loans in Nigeria are, as the name suggests, loan options available to self-employed individuals. The loan program and properties differ between microfinance institutions.

It is created for self-employed individuals to alleviate financial constraints, whether for contract execution or personal reasons.

Are self-employed individuals the same as Business owners (SMEs)?

Perhaps not necessarily. First, self-employed individuals are subject to different tax regulations than business owners. The proprietor of a business can technically become an employee and receive a salary if he or she hires employees and oversees operations. A self-employed individual, on the other hand, is typically the solitary owner and operator of the business.

Where can I acquire a loan for self-employment in Nigeria?

Although being self-employed and being a business owner are distinct, most loan services muddle the distinction. This is notably true in Nigeria, where self-employed individuals are typically grouped with small and medium-sized enterprises (SMEs).

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You can obtain a loan for self-employed individuals from any financial institution that provides them. This encompasses virtually all financial originations in Nigeria. It consists of microfinance banks, commercial banks, fintech digital-based enterprises, individuals, and institutional investors.

What are the requirements for obtaining a financing for the self-employed in Nigeria?

In Nigeria, the terms for obtaining a loan for self-employed individuals vary by financial institution. For instance, microfinance bank loans are typically more accessible, with less documentation and eligibility requirements. However, they offer smaller loan amounts than commercial institutions, which have cumbersome and time-consuming procedures and requirements.

Individual and corporate investors are not a reliable source of financing for Nigerian entrepreneurs. This is due to the fact that many investors would rather invest for a share of equity than offer you a loan like traditional banks.

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Fintech digital platforms provide the simplest method to obtain a self-employed loan in Nigeria, with almost no requirements other than your bank account information. However, their offer is the lowest of all competitors.

In Nigeria, obtaining a loan for self-employed individuals requires the following documentation:

1.  A bank account and bank verification number (BVN) that are operational.
2.  An acceptable form of identification.
3. Form for requesting a loan, along with any other documents required by the institution.

Conclusion

Obtaining a loan for the self-employed is a quick method to escape financial obligations. As a self-employed individual, you can obtain a loan to finance your business or trade contracts. The good news is that an abundance of institutions are willing to offer them. If you satisfy the requirements, you can immediately submit an application for a loan.