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 (FINCLUDE) project.
In a statement issued on Saturday, the World Bank said the funding 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) to the Federal Republic of Nigeria.
The project will be implemented by the Development Bank of Nigeria (DBN), with credit guarantees provided through its subsidiary, Impact Credit Guarantee Limited.
According to the World Bank, MSMEs dominate Nigeria’s business landscape, contribute nearly half of the country’s GDP and account for a significant share of employment, yet continue to face serious challenges accessing formal finance. Fewer than one in twenty MSMEs currently have access to bank credit, while available loans are often short-term, costly and heavily dependent on collateral.
The Bank noted that women-led enterprises, which form a large segment of MSMEs, are disproportionately affected by loan rejections and limited access to tailored financial products. Agribusinesses, critical to food security and rural livelihoods, also struggle to secure longer-term financing for equipment, processing, storage and logistics.
FINCLUDE is designed to tackle these gaps by expanding affordable, longer-term financing and customised solutions, with particular focus on women-led businesses and agribusinesses.
World Bank Country Director for Nigeria, Mathew Verghis, said the project centres on jobs, opportunity and inclusion. He explained that improving access to finance for viable MSMEs would accelerate economic growth and deliver tangible benefits across communities.
“By opening finance for MSMEs—especially women-led firms and agribusinesses—Nigeria can drive growth, create jobs and strengthen communities nationwide,” Verghis said.
The project is also expected to mobilise private investment and promote inclusive and innovative financial products. Through DBN, participating banks, microfinance institutions and fintech firms will be supported to provide larger loans with more flexible repayment terms. Impact Credit Guarantee Limited will scale partial credit guarantees to encourage lending to businesses typically viewed as high risk.
In addition, targeted technical assistance will modernise loan appraisal processes using AI-enabled digital platforms, improve data usage, strengthen impact measurement and build capacity for both MSMEs and financial institutions.
FINCLUDE Task Team Leader, Hadija Kamayo, said the initiative is expected to mobilise about $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.
She added that extending the average maturity of MSME loans to around three years would allow businesses to invest in equipment, staff and productivity, translating financing into jobs and economic growth.
The approval follows earlier reports that the World Bank planned to support Nigeria with a $500 million loan to boost MSME financing. As of June 30, 2025, Nigeria’s external debt stood at $46.98 billion, with the World Bank Group accounting for $19.39 billion, or 41.3 per cent, making it the country’s largest single creditor.