The Federal Government of Nigeria is seeking a new $500 million loan from the World Bank to strengthen access to finance for micro, small, and medium enterprises (MSMEs) — a move aimed at driving inclusive economic growth and stimulating private sector investment.
The facility, tagged the Fostering Inclusive Finance for MSMEs in Nigeria (FINCLUDE) Project, is designed to expand credit access, de-risk lending to small businesses, and promote innovative financial solutions through the Development Bank of Nigeria (DBN) and its subsidiary, Impact Credit Guarantee Limited (ICGL).
According to a project document obtained from the World Bank, the total cost of the initiative is $2.39 billion, with the World Bank providing $500 million — comprising $400 million from the International Bank for Reconstruction and Development (IBRD) and $100 million from the International Development Association (IDA). The remaining $1.89 billion will be mobilised from commercial lenders as unguaranteed financing.
“The proposed FINCLUDE Project leverages the platforms of the Development Bank of Nigeria and its subsidiary, Impact Credit Guarantee Limited, to drive inclusive MSME finance,” the World Bank document stated.
“Through these catalytic institutions, the project will deploy a package of complementary, inclusive, and innovative instruments tailored to the diverse needs of MSMEs in Nigeria.”
Under the plan, the Federal Government will act as the borrower, while the Development Bank of Nigeria will serve as the implementing agency responsible for managing the facility and coordinating its components.
The World Bank, in its assessment, described DBN as “a partner well known to the World Bank with high implementation capacity and a proven track record in designing and executing complex, innovative projects.”
The FINCLUDE Project, expected to receive formal approval on December 18, 2025, consists of three major components:
- Inclusive and innovative MSME finance products
- De-risking and mobilising private capital through partial credit guarantees
- Technical assistance to modernise and digitise the MSME finance ecosystem
Under the first component, the World Bank said the project will provide Tier 2 subordinated capital to qualified financial institutions and establish an MSME Investment Fund that offers both equity and long-term debt to small businesses.
The initiative also aims to crowd-in private capital, test new market models, and foster financial sustainability in Nigeria’s small business sector.
In addition, the project will deliver targeted technical support to financial institutions, enhance regulatory oversight, and strengthen the linkages between DBN, lenders, and entrepreneurs through improved digital infrastructure and data systems.
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