Strategic Capital Management for Sustainable Growth

The Fund generates returns by lending to MSMEs with a focus on collateralized, short-term loans. These loans are secured through various forms of collateral, including inventory, personal assets, and guarantees. The Fund targets returns of T-Bill rate + 9%, offering investors a steady income stream backed by secured loans and rigorous underwriting standards.

The minimum investment for the Grassroots MSME Loans Fund is NGN 100,000. This entry-level investment makes it accessible for a wide range of investors interested in earning steady, high-yield returns through MSME financing.

Loans in the Fund are primarily secured by a pledge of inventory, supported by personal guarantees from borrowers and additional collateral, such as personal assets and acceptable guarantors. The Fund’s structure is designed to protect investor capital by requiring multiple layers of collateral and stringent underwriting criteria.

The loan assessment process involves a comprehensive review that includes field visits to each MSME’s business premises, financial and collateral assessments, and rigorous underwriting procedures. Each loan application is reviewed by a Credit Committee to ensure it aligns with the Fund’s conservative lending profile.

If a borrower defaults, a structured recovery process is initiated, which includes contacting family members and guarantors, sending demand letters, and deploying recovery officers to retrieve collateral if necessary. This process ensures that defaulted loans are managed in a way that minimizes impact on the Fund.

ChronosLP manages risk through strict underwriting standards, requiring collateral and personal guarantees, and maintaining a diversified loan portfolio. The Fund limits exposure by ensuring no single loan exceeds 15% of the portfolio, creating a balanced risk profile for investor

Nigeria’s MSME sector is a vital component of the economy, contributing over 50% to the GDP and employing approximately 80% of the labor force. Despite this, MSMEs face a significant funding gap, creating an opportunity for growth through lending solutions that help drive economic development and offer investors attractive, short-term returns.

While the Fund does not guarantee income payments, it is structured with robust protections, including collateral requirements and a diversified loan portfolio. ChronosLP is committed to meeting quarterly income payments, and if any two consecutive income payments are missed, the Fund will initiate a wind-down process to protect investors.