The World Bank has approved a $500 million financing package to boost access to finance for micro, small, and medium enterprises (MSMEs) in Nigeria under the Fostering Inclusive Finance for MSMEs in Nigeria (FINCLUDE) project.

According to a press release issued in Nigeria on Saturday, the package 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), while credit guarantees will be provided through its subsidiary, Impact Credit Guarantee Limited.

The World Bank said Nigeria’s MSMEs make up the majority of businesses in the country, contribute nearly half of gross domestic product, and account for a significant share of employment. However, access to formal financing remains a major constraint.

It noted that fewer than one in twenty MSMEs have access to bank credit, with available loans often characterised by high interest rates, short tenors, and strict collateral requirements that exclude many viable businesses.

Women-led enterprises, which represent a substantial portion of MSMEs, were identified as being disproportionately affected by higher rejection rates and limited access to tailored financial products. Agribusinesses—critical to food security and rural livelihoods—also face challenges in securing longer-term financing for equipment, processing, storage, and logistics.

The FINCLUDE project is designed to address these gaps by expanding affordable, longer-term financing and customised financial solutions for high-impact segments, particularly women-led businesses and agribusinesses.

Commenting on the approval, World Bank Country Director for Nigeria, Mathew Verghis, said the initiative is focused on jobs, opportunity, and inclusion.

“By opening access to finance for viable MSMEs—especially women-led firms and agribusinesses—Nigeria can accelerate growth and deliver tangible benefits across communities nationwide,” Verghis said.

He added that the project would make it easier for deserving small businesses to access financing needed to grow and create jobs, noting that support for lenders practising inclusive finance and the provision of fairer, longer-term loans would strengthen the enterprises driving Nigeria’s economy.

The World Bank said FINCLUDE is expected to mobilise private investment and expand access to inclusive and innovative financial products nationwide. Through the Development Bank of Nigeria, the project will strengthen the capacity of banks, microfinance institutions, and non-bank financial institutions, including fintech firms, to offer larger loans with more flexible repayment periods.

Impact Credit Guarantee Limited will scale partial credit guarantees to encourage lenders to extend financing to businesses that would otherwise be considered too risky. In addition, targeted technical assistance will be provided to modernise loan appraisal processes using AI-enabled digital platforms, improve data utilisation, accelerate credit decisions, strengthen impact measurement, and build capacity among both MSMEs and participating financial institutions.

The project places strong emphasis on inclusion to ensure women-led businesses and agribusinesses benefit significantly from the intervention.

FINCLUDE Task Team Leader, Hadija Kamayo, said the initiative 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 enterprises and 100,000 agribusinesses.

She added that the project would issue up to $800 million in guarantees to catalyse lending and extend the average maturity of MSME loans to approximately three years. This, she noted, would enable firms to invest in equipment, facilities, staff, and productivity, translating financing into jobs and economic 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, according to data from the Debt Management Office.

The World Bank Group remains Nigeria’s largest single creditor, accounting for $19.39 billion—representing 41.3 per cent of the country’s total external debt—underscoring its significant role in financing Nigeria’s development initiatives.