The World Bank has approved the Fostering Inclusive Finance FINCLUDE project worth $500 million financing package, for Micro, Small, and Medium Enterprises, MSMEs in Nigeria.
The operation comprises a $400 million International Bank for Reconstruction and Development IBRD loan and a $100 million International Development Association IDA credit and will be implemented by the Development Bank of Nigeria DBN, with credit guarantees delivered through DBN’s subsidiary, Impact Credit Guarantee Limited ICGL.
Nigeria’s micro, small, and medium enterprises MSMEs form the backbone of the economy—accounting for most businesses, nearly half of GDP, and a large share of jobs—yet they face longstanding barriers to formal finance. Fewer than one in twenty 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 longer‑tenor financing for equipment, processing, storage, and logistics. FINCLUDE addresses these constraints by expanding affordable, longer‑term finance and tailored solutions to segments with the greatest development impact.
MSMEs are businesses that operate on a smaller scale than large corporations and are vital for economic growth and job creation globally. They are the backbone of the economy, contributing nearly 48% to the national GDP and employing approximately 84% of the labor force.
“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,” said Mathew Verghis, World Bank Country Director for Nigeria. “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 project will help to mobilize 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 modernize loan appraisal with AI-enabled digital platform to speed decisions and use better data, strengthen impact measurement, and build capacity for both MSMEs and participating financial institutions. A strong emphasis on inclusion will ensure women‑led businesses and agribusinesses benefit from these improvements.
“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 catalyze 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” said Hadija Kamayo, Task Team Leader for FINCLUDE.
