World Bank Approves $500m To Broaden SME Credit In Nigeria

The World Bank on Friday approved a $500 million financing package as part of a broader measure to boost small businesses in Africa’s most populous economy.

The facility which is under the Fostering Inclusive Finance for MSMEs in Nigeria (FINCLUDE) project, comprises a $400 million International Bank for Reconstruction and Development (IBRD) loan and a $100 million International Development Association (IDA) credit, the Washington-based fund said in a statement.

The funds will be implemented by the Development Bank of Nigeria (DBN), with credit guarantees delivered through DBN’s subsidiary, Impact Credit Guarantee Limited (ICGL).

“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,” said World Bank country director for Nigeria, Mathew Verghis.

“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.”

Nigeria’s micro, small, and medium enterprises (MSMEs) form the backbone of the economy, accounting for almost 90 percent of businesses, nearly half of GDP, and a large share of jobs, yet they face longstanding barriers to formal finance.

According to the World Bank, fewer than one in twenty MSMEs have access to bank credit; loans are often short‑term and costly; and collateral requirements exclude many viable firms.

Women‑led enterprises, which make up a substantial portion of MSMEs, are disproportionately affected, facing higher rejection rates and limited tailored products.

Agribusinesses, central to food security and rural livelihoods, similarly struggle to obtain longer‑tenor financing for equipment, processing, storage, and logistics.

“FINCLUDE will help to mobilize approximately $1.89 billion in private capital, expand debt financing to 250,000 MSMEs—including at least 150,000 women‑led businesses and 100,000 agribusinesses—and issue up to $800 million in guarantees to catalyse lending,” said , Task Team Leader for FINCLUDE, Hadija Kamayo.

By extending the average maturity of MSME loans to about three years, it will help firms invest in equipment, factories, staff, and productivity, translating finance into jobs and growth”

The World Bank said FINCLUDE addresses these constraints by expanding affordable, longer‑term finance and tailored solutions to segments with the greatest development impact.

The multilateral institution said the project will help to mobilize private investment and expand access to and usage of inclusive, innovative financial products for MSMEs nationwide.

“Through DBN, the operation will strengthen the capacity of banks, including microfinance banks and non-bank financial institutions such as Financial Technologies (FinTech’s), to provide larger loans with more reasonable repayment periods, and—through ICGL—will scale partial credit guarantees so that lenders can extend credit to businesses they might otherwise consider too risky,” it said.

“Targeted technical assistance will modernise loan appraisal with AI-enabled digital platforms to speed decisions and use better data, strengthen impact measurement, and build capacity for both MSMEs and participating financial institutions. A strong emphasis on inclusion will ensure women‑led businesses and agribusinesses benefit from these improvements.”