THE World Bank has approved a $500 million financing package to expand access to finance micro, small, and medium enterprises (MSMEs) in Nigeria under the Fostering Inclusive Finance for MSMEs in Nigeria project.
In a statement issued on Saturday, December 20, the World Bank announced the approval, which included a $400 million loan from the International Bank for Reconstruction and Development and a $100 million credit from the International Development Association (IDA) for Nigeria.
According to the statement, the project, known as FINCLUDE, will be implemented by the Development Bank of Nigeria. At the same time, credit guarantees will be delivered through its subsidiary, Impact Credit Guarantee Limited.
“The World Bank today approved the Fostering Inclusive Finance for MSMEs in Nigeria project, a $500 million financing package to the Federal Republic of Nigeria.
“The operation comprises a $400 million International Bank for Reconstruction and Development loan and a $100 million International Development Association credit, which will be implemented by the Development Bank of Nigeria, with credit guarantees delivered through DBN’s subsidiary, Impact Credit Guarantee Limited,” the statement read.
The World Bank noted that MSMEs accounted for the majority of businesses in Nigeria, contributing nearly half of the country’s gross domestic product, and providing a large share of jobs, but persistently facing barriers to access formal finance.
It said less than one in 20 MSMEs had access to bank credit, while available loans were often short-term, costly, and dependent on collateral requirements that excluded many viable businesses. Women-led enterprises, which make up a significant share of MSMEs, were said to be disproportionately affected by higher rejection rates and limited access to tailored financial products.
Similarly, agribusinesses, which play a critical role in food security and rural livelihoods, were identified as facing challenges in securing longer-term financing for equipment, processing, storage, and logistics.
The World Bank explained that FINCLUDE was designed to address these constraints by expanding affordable, longer-term finance and tailored solutions for segments with the greatest development impact, particularly women-led businesses and agribusinesses.
Commenting on the approval, the World Bank Country Director for Nigeria, Mathew Verghis, said the project was centred on jobs, opportunity, and inclusion.
“FINCLUDE is about jobs, opportunity, and inclusion. By opening finance for viable MSMEs -particularly women-led firms and agribusinesses – Nigeria can accelerate growth and deliver tangible benefits in 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 practise 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,” Verghis was quoted as saying.
The World Bank added that the project would help mobilise private investment and expand access to inclusive and innovative financial products for MSMEs across the country.
Through the Development Bank of Nigeria, it said the operation would strengthen the capacity of banks, including microfinance banks and non-bank financial institutions such as financial technology firms, to provide larger loans with more reasonable repayment periods.
Through Impact Credit Guarantee Limited, the project will also scale partial credit guarantees to enable lenders to extend credit to businesses they might otherwise consider too risky.
The statement further said targeted technical assistance would be provided to modernise loan appraisal through AI-enabled digital platforms to speed up credit decisions, improve data use, strengthen impact measurement, and build capacity for both MSMEs and participating financial institutions.
The Task Team Leader for FINCLUDE, Hadija Kamayo, said the project is expected to mobilise about $1.89 billion in private capital and expand debt financing to 250,000 MSMEs, including at least 150,000 women-led businesses and 100,000 agribusinesses.
The approval adds to Nigeria’s growing portfolio of World Bank-supported programmes. As of June 30, 2025, Nigeria’s external debt stood at $46.98 billion, according to the Debt Management Office.
The World Bank Group remains Nigeria’s largest single creditor, accounting for $19.39 billion of the total external debt, comprising $18.04 billion from the IDA and $1.35 billion from the IBRD. This represents 41.3 per cent of Nigeria’s external debt.
Nurudeen Akewushola is an investigative reporter and fact-checker with The ICIR. He believes courageous in-depth investigative reporting is the key to social justice, accountability and good governance in society. You can reach him via nyahaya@icirnigeria.org and @NurudeenAkewus1 on Twitter.