The World Bank has approved $500 million in financing to expand access to credit for micro, small and medium enterprises in Nigeria, targeting long-standing funding gaps that continue to constrain business growth.
In a press statement issued on Saturday, the multilateral lender said the approval covers the Fostering Inclusive Finance for MSMEs in Nigeria (FINCLUDE) project, structured as a blended facility comprising $400 million from the International Bank for Reconstruction and Development (IBRD) and $100 million from the International Development Association (IDA).
The project will be implemented by the Development Bank of Nigeria, with credit guarantees delivered through its subsidiary, Impact Credit Guarantee Limited.
What World Bank is saying
According to the World Bank, MSMEs dominate Nigeria’s business landscape, contribute nearly half of gross domestic product and account for a significant share of employment. Despite their importance, access to formal credit remains limited, with fewer than one in twenty MSMEs able to secure bank loans. Available financing is often short-term, expensive and tied to collateral requirements that exclude many viable enterprises.
Women-led businesses are disproportionately affected, facing higher rejection rates and limited access to tailored financial products. Agribusinesses, which are critical to food security and rural livelihoods, also struggle to access longer-tenor financing needed for equipment acquisition, processing, storage and logistics.
Focus on inclusion and longer-term financing
The FINCLUDE project is designed to address these constraints by expanding access to affordable, longer-term financing, particularly for women-led businesses and agribusinesses.
Through the Development Bank of Nigeria, the programme will strengthen the capacity of commercial banks, microfinance banks and non-bank financial institutions, including fintech firms, to extend larger loans with more flexible repayment periods.
Through Impact Credit Guarantee Limited, the project will scale partial credit guarantees to encourage lenders to provide financing to MSMEs that would typically be considered high-risk.
The programme will also deploy targeted technical assistance to modernise loan appraisal processes using AI-enabled digital platforms, improve data usage, speed up credit decisions and strengthen impact measurement across participating institutions.
Speaking on the approval, the World Bank Country Director for Nigeria, Mathew Verghis, said the project is aimed at boosting job creation, inclusion and economic opportunities nationwide.
He noted that by easing access to finance for viable MSMEs, especially women-led enterprises and agribusinesses, Nigeria could accelerate growth and deliver tangible benefits across communities.
Verghis was quoted in the statement as saying, “FINCLUDE is about jobs, opportunity, and inclusion. By opening finance for viable MSMEs particularly women‑led firms and agribusinesses—Nigeria can accelerate growth and deliver tangible benefits in communities nationwide.
“The project will make it easier for deserving small businesses to get the finance they need to grow and hire workers. With better support for lenders that practice inclusive finance and fairer, longer‑term loans for entrepreneurs, we are backing the people who power Nigeria’s economy especially women and those in agriculture.”
Mobilising private capital
Beyond direct lending, the World Bank said FINCLUDE is expected to mobilise approximately $1.89 billion in private capital and expand debt financing to about 250,000 MSMEs nationwide.
- At least 150,000 of the targeted beneficiaries are expected to be women-led businesses, while 100,000 will be agribusinesses. The programme also plans to issue up to $800 million in credit guarantees to catalyse additional lending from financial institutions.
- According to Hadija Kamayo, Task Team Leader for FINCLUDE, the project’s structure is designed to translate access to finance into productivity gains, investment and job creation.
She said extending the average maturity of MSME loans to about three years would allow businesses to invest in equipment, facilities and workforce expansion, ultimately supporting growth and employment.
