The World Bank has approved a $500 million financing package to expand access to finance for micro, small, and medium enterprises (MSMEs) in Nigeria under the Fostering Inclusive Finance for MSMEs in Nigeria project.
In a press release by the World Bank in Nigeria on Saturday, the global lender announced that the approval encompasses a $400 million loan from the International Bank for Reconstruction and Development and a $100 million credit from the International Development Association to the Federal Republic of Nigeria.
The statement noted that the project, known as FINCLUDE, will be implemented by the Development Bank of Nigeria, with credit guarantees to be delivered through its subsidiary, Impact Credit Guarantee Limited.
‘The World Bank today approved the Fostering Inclusive Finance for MSMEs in Nigeria project, a $500 million financing package to the Federal Republic of Nigeria.
‘The operation comprises a $400 million International Bank for Reconstruction and Development loan and a $100 million International Development Association credit and will be implemented by the Development Bank of Nigeria (DBN), with credit guarantees delivered through DBN’s subsidiary, Impact Credit Guarantee Limited’, the statement read.
According to the World Bank, Nigeria’s MSMEs account for most businesses in the country, contribute nearly half of gross domestic product, and provide a large share of jobs, but continue to face persistent barriers in accessing formal finance.
The institution said fewer than one in twenty MSMEs have access to bank credit, while available loans are often short-term, expensive, and dependent on collateral requirements that exclude many viable firms.
It added that women-led enterprises, which make up a substantial portion of MSMEs, are disproportionately affected by higher rejection rates and limited access to tailored financial products.
Agribusinesses, described as central to food security and rural livelihoods, were also said to face difficulties in securing longer-tenor financing for equipment, processing, storage, and logistics.
The press release stated that FINCLUDE is designed to address these challenges by expanding affordable, longer-term finance and tailored solutions for segments with the greatest development impact, particularly women-led businesses and agribusinesses.
Commenting on the approval, the World Bank Country Director for Nigeria, Mathew Verghis, said the project was focused on jobs, opportunity, and inclusion.
He said opening access to finance for viable MSMEs, especially women-led firms and agribusinesses, would help Nigeria accelerate growth and deliver tangible benefits across communities.
Verghis added that the project would make it easier for deserving small businesses to obtain the financing needed to grow and hire workers, noting that support for lenders practising inclusive finance and the provision of fairer, longer-term loans would strengthen the businesses that drive Nigeria’s economy.
‘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 practise 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’, Verghis was quoted as saying in the statement.
The World Bank said the project would help mobilise private investment and expand access to inclusive and innovative financial products for MSMEs nationwide.
Through the Development Bank of Nigeria, it explained, the operation would strengthen the capacity of banks, including microfinance banks and non-bank financial institutions such as financial technology firms, to provide larger loans with more reasonable repayment periods.
Through Impact Credit Guarantee Limited, the project will also scale partial credit guarantees to enable lenders to extend credit to businesses they might otherwise consider too risky.
The statement added that targeted technical assistance would be provided to modernise loan appraisal using AI-enabled digital platforms to speed up credit decisions, improve the use of data, strengthen impact measurement, and build capacity for both MSMEs and participating financial institutions.
It stressed that a strong emphasis on inclusion would ensure that women-led businesses and agribusinesses benefit from the interventions.
The Task Team Leader for FINCLUDE, Hadija Kamayo, said the project is expected to mobilise about $1.89 billion in private capital and expand debt financing to 250,000 MSMEs, including at least 150,000 women-led businesses and 100,000 agribusinesses.
Kamayo added that the initiative would issue up to $800 million in guarantees to catalyse lending and extend the average maturity of MSME loans to about three years, enabling firms to invest in equipment, factories, staff, and productivity, and translate financing into jobs and growth.
‘FINCLUDE will help to mobilise 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. 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’, Kamayo said in the statement.
It was earlier reported that the World Bank planned to approve a $500 million loan to Nigeria on Friday as part of efforts to expand access to finance for micro, small, and medium enterprises across the country.
The approved loan adds to Nigeria’s growing portfolio of World Bank-supported programmes. As of 30 June 2025, Nigeria’s external debt stood at $46.98 billion, according to the Debt Management Office.
The World Bank Group remains Nigeria’s largest single creditor, accounting for $19.39bn of the total, comprising $18.04 billion from the IDA and $1.35 billion from the IBRD.
This represents 41.3 per cent of the country’s external debt, underscoring the bank’s dominant role in financing Nigeria’s development initiatives.
