The World Bank has approved a $500 million financing package to expand access to finance for micro, small, and medium enterprises (MSMEs) in Nigeria.
The funding, which comprises a $400 million loan from the International Bank for Reconstruction and Development and a $100 million credit from the International Development Association, aims to address the persistent barriers MSMEs face in accessing formal finance . International tax consulting
MSMEs dominate Nigeria’s business landscape, contributing nearly half of the country’s gross domestic product and accounting for a large share of employment. However, fewer than one in twenty MSMEs have access to bank credit, and available loans are often short-term, expensive, and dependent on collateral requirements that exclude many viable firms .
The Fostering Inclusive Finance for MSMEs in Nigeria (FINCLUDE) project will be implemented by the Development Bank of Nigeria, with credit guarantees delivered through its subsidiary, Impact Credit Guarantee Limited. The project aims to: International tax consulting
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– Expand affordable, longer-term finance and tailored solutions for segments with the greatest development impact, particularly women-led businesses and agribusinesses
– Mobilize private investment and expand access to inclusive and innovative financial products for MSMEs nationwide
– Strengthen the capacity of banks, including microfinance banks and non-bank financial institutions, to provide larger loans with more reasonable repayment periods .
The FINCLUDE project is expected to:
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– 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
– Issue up to $800 million in guarantees to catalyze 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.
