November 10, 2025/CSL Update
Authorities are in advanced discussions with the World Bank to secure a US$500 million loan aimed at expanding access to finance for micro, small, and medium enterprises (MSMEs). The funding forms part of a broader strategy to promote private sector–led growth and boost employment generation. According to local media reports, the proposed loan is part of the Fostering Inclusive Finance for MSMEs in Nigeria (FINCLUDE) Project, a comprehensive US$2.39 billion initiative designed to strengthen financial inclusion and enhance the resilience of small businesses across key sectors of the economy.
The US$500 million contribution from the World Bank is expected to be sourced from two of its main lending arms: the International Bank for Reconstruction and Development (IBRD), which will provide US$400 million, and the International Development Association (IDA), contributing the remaining US$100 million.
While details on the balance of the project’s financing have not yet been disclosed, it is anticipated that additional funding could be mobilised from other multilateral development partners and domestic financial institutions.
The FINCLUDE Project is expected to be led by the Development Bank of Nigeria (DBN) and its wholly owned subsidiary, Impact Credit Guarantee Limited (ICGL). Both institutions will play a pivotal role in de-risking MSME lending and expanding access to affordable finance for small businesses. Under the project framework, DBN will provide funding support to eligible financial institutions and mobilise domestic institutional investors to participate in MSME lending. Meanwhile, ICGL will offer partial credit guarantees to reduce credit risk and encourage greater participation from private sector lenders.
If implemented effectively, the project could serve as a catalyst for MSME development, boosting income generation and employment growth across key sectors. The agriculture, manufacturing, and services sectors are expected to benefit the most.
Access to credit remains one of the most significant challenges facing MSMEs in Nigeria. Commercial bank lending to this segment is limited due to high perceived risks, strict collateral requirements, and elevated interest rates, which often exceed 25% per annum. As of the end of March, the average maximum lending rate of commercial banks stood at approximately 30.2% per annum.
Consequently, many small businesses rely on informal or short-term financing, which constrains their capacity to expand and invest. Data from NBS shows that despite MSMEs accounting for over 80% of employment and nearly 50% of GDP, only about 4% have access to formal credit, and roughly 1% receive loans from the banking system.
Click here to download full report: CSL Nigeria Daily – 10 November 2025 – Debt.pdf
