FirstBank LGA Revenue Overdraft gives Nigerian LGAs access to up to N50 million with no collateral

The FirstBank LGA Revenue Overdraft is a tailored financing solution for Nigerian Local Government Areas (LGAs) that need quick, collateral-free access to working capital. Offering up to N50 million with flexible 12-month terms, the facility is designed around domiciled subventions and local revenue flows to help LGAs keep projects moving without the usual loan hurdles.

Why the FirstBank LGA Revenue Overdraft matters

For many LGAs across Nigeria, cashflow gaps stall essential services and small capital works. The FirstBank LGA Revenue Overdraft bridges those gaps by allowing councils to draw beyond their current account balance against future subventions, giving immediate liquidity for priority projects.

This overdraft supports fiscal agility: municipalities can undertake repairs, pay contractors and maintain payroll without selling assets or waiting weeks for traditional loan approvals. The product’s structure—no tangible collateral and a clear clean-up cycle—matches the realities of local government finance in Nigeria.

Key features and eligibility

The FirstBank LGA Revenue Overdraft provides a single obligor limit of 50% of your average net monthly subvention, capped at N50 million, with a standard 12-month tenor and a 30-day clean-up cycle. To qualify, LGAs must domicile their subvention account with FirstBank and have received at least three months of subvention into that account.

Irrevocable domiciliation of monthly subventions and other income sources is mandatory, and certain bodies such as LCDAs and some education authorities are excluded. The overdraft is suitable for working capital needs and small capital projects, giving LGAs a practical alternative to long-term borrowing.

How LGAs apply and use the funds

Application is straightforward: visit a nearby FirstBank branch or contact your relationship manager with proof of account domiciliation, subvention receipts for the last three months, and the council’s authorising resolutions. The bank processes applications with attention to subvention history and project viability.

Once approved, LGAs can deploy funds for immediate needs—road fixings, clinic upgrades, school support, or operational expenses. The overdraft’s reliance on domiciled revenue means repayments are automatically managed via subvention inflows, reducing administrative burden for finance officers.

Benefits, risks and practical tips

Major benefits include fast access to up to N50 million, competitive rates compared with conventional loans, and no requirement for tangible collateral. The FirstBank LGA Revenue Overdraft is particularly useful for councils that have regular subvention flows but lack physical assets to pledge.

Risks hinge on inconsistent subvention releases—if inflows falter, councils must manage the 30-day clean-up carefully. Practical tips: use the overdraft for high-impact, time-sensitive projects; maintain clear records of subvention receipts; and keep an open line with your FirstBank account manager to optimise terms and ensure smooth rollovers.