The World Bank has approved $500 million in financing to expand access to credit for micro, small and medium enterprises (MSMEs) in Nigeria, targeting persistent funding gaps that continue to limit business growth and job creation across the country.
In a press statement issued on Saturday, the multilateral lender said the approval is for 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 and $100 million from the International Development Association. The project will be implemented by the Development Bank of Nigeria, with credit guarantees provided through its subsidiary, Impact Credit Guarantee Limited.
The World Bank noted that MSMEs dominate Nigeria’s business environment, contribute nearly half of the country’s gross domestic product and account for a large share of employment. However, access to formal credit remains severely constrained, with fewer than one in twenty MSMEs able to secure bank loans. Where financing is available, it is often short-term, costly and tied to collateral requirements that exclude many viable businesses.
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Women-led enterprises face even greater challenges, experiencing higher loan rejection rates and limited access to financial products tailored to their needs. Agribusinesses, which play a critical role in food security and rural livelihoods, also struggle to obtain longer-tenor financing required for investments in equipment, processing, storage and logistics.
The FINCLUDE project is designed to address these challenges by expanding access to affordable, longer-term financing, with a strong focus on 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 provide larger loans with more flexible repayment terms. Through Impact Credit Guarantee Limited, the project will scale partial credit guarantees to encourage lenders to extend credit to MSMEs typically considered high-risk.
The programme will also provide targeted technical assistance to modernise loan appraisal processes using AI-enabled digital platforms, improve data usage, accelerate credit decisions and strengthen impact measurement across participating financial institutions.
Commenting on the approval, World Bank Country Director for Nigeria, Mathew Verghis, said the project is aimed at boosting job creation, inclusion and economic opportunity nationwide. He noted that easing access to finance for viable MSMEs, particularly women-led firms and agribusinesses, could help accelerate economic growth and deliver tangible benefits across communities.
The World Bank said FINCLUDE is expected to mobilise about $1.89 billion in private capital and expand debt financing to approximately 250,000 MSMEs across Nigeria. At least 150,000 of the beneficiaries are projected to be women-led businesses, while about 100,000 will be agribusinesses.
The programme also plans to issue up to $800 million in credit guarantees to catalyse additional lending by financial institutions.
According to FINCLUDE Task Team Leader, Hadija Kamayo, the project’s structure is designed to translate improved access to finance into higher productivity, increased investment and job creation.
She noted that extending the average maturity of MSME loans to around three years would enable businesses to invest in equipment, facilities and workforce expansion, supporting sustainable growth and employment.
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