The World Bank has approved a $500 million financing package aimed at expanding access to finance for Micro, Small, and Medium Enterprises (MSMEs) in Nigeria, a sector widely regarded as the backbone of the country’s economy.
According to a statement released on Friday, the funding will be provided under the Fostering Inclusive Finance (FINCLUDE) project and comprises a $400 million loan from the International Bank for Reconstruction and Development (IBRD) and a $100 million credit from the International Development Association (IDA). The project will be implemented by the Development Bank of Nigeria (DBN), with credit guarantees issued through its subsidiary, Impact Credit Guarantee Limited (ICGL).
MSMEs account for the majority of businesses in Nigeria, contribute nearly half of the country’s GDP, and provide a significant share of employment. Despite their importance, access to formal finance remains limited, with fewer than one in twenty MSMEs able to obtain bank credit. Where financing is available, loans are often short-term, expensive, and dependent on collateral requirements that exclude many viable enterprises.
The World Bank noted that women-led businesses, which form a substantial proportion of MSMEs, face higher rejection rates and limited access to tailored financial products. Agribusinesses, critical to food security and rural livelihoods, also struggle to secure long-term financing for equipment, processing, storage, and logistics.
The FINCLUDE project seeks to address these challenges by expanding access to affordable, longer-term financing and developing tailored solutions for high-impact sectors. Speaking on the initiative, Mathew Verghis, World Bank Country Director for Nigeria, said the project is designed to promote jobs, opportunity, and inclusion by supporting viable MSMEs—particularly women-led enterprises and agribusinesses.
He explained that the project will strengthen lenders that practice inclusive finance, while enabling small businesses to access fairer and longer-term loans to grow operations and create jobs. The initiative is also expected to mobilise private investment and expand the use of innovative financial products nationwide.
Through DBN, FINCLUDE will enhance the capacity of banks, microfinance institutions, non-bank financial institutions, and financial technology firms to provide larger loans with more flexible repayment terms. In addition, ICGL will scale up partial credit guarantees to encourage lenders to extend credit to enterprises they might otherwise consider too risky.
The project also includes targeted technical assistance to modernise loan appraisal processes using AI-enabled digital platforms, improve impact measurement, and build capacity among both MSMEs and participating financial institutions. A strong focus on inclusion will ensure that women-led businesses and agribusinesses benefit significantly from the programme.
According to the World Bank, FINCLUDE is expected 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 credit guarantees. By extending the average maturity of MSME loans to about three years, the project aims to enable firms to invest in equipment, infrastructure, staffing, and productivity, ultimately translating access to finance into sustainable jobs and economic growth.
Hadija Kamayo, Task Team Leader for FINCLUDE, described the initiative as a major step toward transforming access to finance for small businesses and strengthening Nigeria’s broader economic development.
