World Bank Approves $500m Package to Boost MSME Financing in Nigeria

The World Bank approved a $500 million financing package on December 20, 2025, to improve access to credit for micro, small, and medium enterprises in Nigeria. The funds support the Fostering Inclusive Finance for MSMEs in Nigeria project, known as FINCLUDE. It includes a $400 million loan from the International Bank for Reconstruction and Development and a $100 million credit from the International Development Association.

The Development Bank of Nigeria will implement the project, with credit guarantees handled by its subsidiary, Impact Credit Guarantee Limited. Nigerian MSMEs make up the majority of businesses, contribute nearly half of the gross domestic product, and create many jobs. Yet fewer than one in twenty secure bank loans, which are often short-term, costly, and demand heavy collateral that blocks viable firms.

Women-led enterprises suffer higher rejection rates and lack suitable products. Agribusinesses find it hard to obtain longer-term funding for equipment, processing, storage, and logistics. FINCLUDE tackles these issues by offering affordable, extended finance and customised options, especially for women-led firms and agribusinesses.

The project will draw in private capital, roll out inclusive products across the country, build capacity in banks including microfinance and fintech providers, and provide partial credit guarantees worth up to $800 million to support lending to higher-risk borrowers. It also includes technical help to update loan assessments with AI tools, enhance data usage, improve impact tracking, and train MSMEs and lenders, with a strong focus on women and agriculture.

Officials expect the initiative to mobilise about $1.89 billion in private funds and reach 250,000 MSMEs, including at least 150,000 women-led businesses and 100,000 agribusinesses. Loan maturities should stretch to around three years on average, allowing investments in equipment, facilities, hiring, and efficiency that drive employment and economic expansion.

World Bank Country Director for Nigeria, Mathew Verghis, called the project a step toward 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,” he said.

Task Team Leader Hadija Kamayo noted the potential to expand debt financing widely and extend loan terms to fuel productivity gains. As small businesses struggle for capital amid tough conditions, this support promises vital relief to entrepreneurs powering much of Nigeria’s economy.