Nigeria's government says it will hand out more than half a million dollars collateral-free loans to small and medium-sized businesses. The move is to boost the role of SMEs in the economy. CGTN's Kelechi Emekalam has more.

A beehive of activities in this shared workshop in the Nigeria's capital - Abuja. Oladele Qazim does not have enough money to rent his own shop, so he shares the rental cost of this shade with a dozen other carpenters. Businesses like his are what the federal government is targeting with unsecured loans. Under the scheme, small and medium scale businesses struggling to access credit could get as much as $20,000 unsecured loan. The loans attract a 5% interest and repayment period is within 5-7 years. Poor access to credit here is blamed for stagnation of small businesses.

OLADELE QAZIM PIDGIN CARPENTER "Oh wow,10 Naira, it would boost my business if I get 10 million Naira. I will be very happy. From there I would get a factory and open a showroom. If I work in the factory, I'll display my products in the showroom and from there I can get some contracts. If the government can do this for us, I'll be very happy."

60% of Nigeria's population is youth, most of them are educated but out of job. Under the economic diversification plan, the government is encouraging young people to create businesses with possibilities of increasing job opportunities.

ADETOKUNBO KAYODE, CHAIRMAN NIGERIAN CHAMBER OF COMMERCE "The economy of Nigeria is run by the informal sector. It's about 85 percent. How do you increase our tax base when the bulk of the economy is in the hands of the informal sector? But if CBN is able to do this, engage with the organised private sector to fund the SMEs who are the critical members of the organised private sector, Chambers of Commerce and so on, they can do well, they can create more, they can produce more, we can employ more people, they can get people off the streets and they can also pay Tax."

KELECHI EMEKALAMABUJA, NIGERIA "The government has not yet stated when it would start disbursing the funds to busines,s but it says millions of small and medium scale businesses are being pre-qualified. Key requirement for a business to qualify is the full enrolment with government agencies like the Federal Inland revenue services and other regulatory agencies like the food and drug agency. Besides enabling businesses with the scheme, the government hope to lift many businesses out of the informal sector and widen tax base."