In Bid to Expand Access to Finance, World Bank Approves $500m for Nigeria’s Small Businesses.

Ndubuisi Francis in Abuja 

The World Bank has approved a $500 million financing package for Nigeria under the Fostering Inclusive Finance for MSMEs in Nigeria (FINCLUDE) project.

The package comprises a $400 million International Bank for Reconstruction and Development (IBRD) loan and a $100 million International Development Association (IDA) credit, to be implemented by the Development Bank of Nigeria (DBN), with credit guarantees provided through DBN’s subsidiary, Impact Credit Guarantee Limited (ICGL).

Both IBRD and IDA are members of the World Bank Group.

FINCLUDE is designed to address constraints faced by micro, small, and medium enterprises (MSMEs) in Nigeria

Despite MSMEs forming the backbone of Nigeria’s economy—accounting for most businesses, nearly half of gross domestic product (GDP), and a large share of jobs —they face long-standing barriers to formal finance.

 Fewer than one in 20 MSMEs have access to bank credit; loans are often short-term and costly; and collateral requirements exclude many viable firms. 

Women-led enterprises, which make up a substantial portion of MSMEs, are disproportionately affected, facing higher rejection rates and limited tailored products. 

Agribusinesses, central to food security and rural livelihoods, similarly struggle to obtain more extended‑tenor financing for equipment, processing, storage, and logistics. FINCLUDE is designed to address these constraints by expanding access to affordable, longer-term finance and tailored solutions for segments with the most significant development impact.

In his remarks, the World Bank Country Director for Nigeria, Mathew Verghis, said: “FINCLUDE is about jobs, opportunity, and inclusion. By expanding access to finance for viable MSMEs—particularly women-led firms and agribusinesses—Nigeria can accelerate growth and deliver tangible benefits across 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 practice 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.”

 The FINCLUDE project will help to mobilise private investment and expand access to and usage of inclusive, innovative financial products for MSMEs nationwide. 

Through DBN, the operation will strengthen the capacity of banks, including microfinance banks and non-bank financial institutions such as Financial Technologies (FinTech’s), to provide larger loans with more reasonable repayment periods, and—through ICGL—will scale partial credit guarantees so that lenders can extend credit to businesses they might otherwise consider too risky. 

Targeted technical assistance will modernise loan appraisal by leveraging AI-enabled digital platforms to accelerate decision-making, improve data quality, strengthen impact measurement, and build capacity for both MSMEs and participating financial institutions. 

According to the World Bank, a strong emphasis on inclusion will ensure that women-led businesses and agribusinesses benefit from these improvements.

Also commenting, Task Team Leader for FINCLUDE, Hadija Kamayo, said: “FINCLUDE will help to 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—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.”