The World Bank has approved a $500 million financing package to expand access to credit for micro, small and medium enterprises (MSMEs) in Nigeria, in a move aimed at boosting jobs, productivity and inclusive economic growth.

The funding, announced in a statement released in Nigeria on Saturday, is being provided under the Fostering Inclusive Finance for MSMEs in Nigeria (FINCLUDE) project. It consists of 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), while credit guarantees will be issued through its subsidiary, Impact Credit Guarantee Limited.

According to the World Bank, MSMEs make up the vast majority of businesses in Nigeria, contribute close to half of the country’s gross domestic product and account for a significant share of employment.

However, access to formal financing remains a major challenge.
The lender noted that fewer than one in 20 MSMEs currently have access to bank credit, while available loans are often short-term, expensive and dependent on collateral that many small businesses cannot provide.

Women-led enterprises, which form a large part of Nigeria’s MSME sector, were said to be particularly disadvantaged, facing higher rejection rates and limited access to suitable financial products.

Agribusinesses, critical to food security and rural livelihoods, also struggle to secure long-term funding for equipment, processing, storage and logistics.
The World Bank said FINCLUDE is designed to tackle these gaps by expanding affordable, longer-term financing and developing tailored financial solutions, especially for women-owned businesses and agribusinesses with high development impact.

Commenting on the approval, the World Bank’s Country Director for Nigeria, Mathew Verghis, said the project was centred on jobs, opportunity and inclusion.

He explained that improving access to finance for viable MSMEs would help Nigeria accelerate economic growth and deliver tangible benefits across communities, particularly by enabling small firms to expand operations and employ more people.

Under the programme, DBN 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 periods.

Through Impact Credit Guarantee Limited, partial credit guarantees will also be scaled up to encourage lending to businesses considered too risky under current market conditions.

The project will also provide targeted technical assistance, including the use of AI-powered digital platforms to modernise loan appraisal, speed up credit decisions, improve data use and strengthen impact measurement for both lenders and MSMEs.

The World Bank said FINCLUDE 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 to stimulate lending.

The initiative is also expected to extend the average maturity of MSME loans to about three years, allowing firms to invest in equipment, facilities, staff and productivity, translating financing into jobs and sustainable growth.

The approval adds to Nigeria’s expanding portfolio of World Bank-supported programmes. As of June 30, 2025, Nigeria’s external debt stood at $46.98 billion, with the World Bank Group remaining the country’s largest single creditor, accounting for over 41 per cent of the total.