The World Bank is expected to approve a $500 million loan for Nigeria on Friday as part of a major push to improve access to finance for micro, small, and medium enterprises (MSMEs) across the country. The facility, known as the Fostering Inclusive Finance for MSMEs in Nigeria (FINCLUDE) Project, is designed to unlock private capital and expand innovative financial products for small businesses struggling with limited credit access.
If approved, the loan will form part of a broader $2.39 billion financing package, with the World Bank contributing $500 million. Of this amount, $400 million will come from the International Bank for Reconstruction and Development, while $100 million will be provided by the International Development Association. The remaining $1.89 billion is expected to be raised from commercial lenders without government guarantees, highlighting the project’s private-sector-led structure.
Under the arrangement, the Nigerian Federal Government will act as the borrower, while the Development Bank of Nigeria will serve as the implementing agency. The project will also leverage the bank’s subsidiary, Impact Credit Guarantee Limited, to reduce lending risks and channel funds to MSMEs that are often excluded from traditional financing.
The FINCLUDE project is built around three pillars: deploying inclusive and innovative MSME finance products, mobilising private capital through partial credit guarantees, and providing technical assistance to modernise Nigeria’s MSME finance ecosystem. According to the World Bank, the initiative will support subordinated capital for financial institutions, establish an MSME investment fund, and strengthen digital and regulatory frameworks to improve long-term sustainability.
The approval comes as Nigeria navigates economic reforms aimed at stabilising growth and restoring investor confidence. While the World Bank acknowledged progress from subsidy removals and exchange-rate reforms, it warned that access to finance remains uneven—particularly for MSMEs, women-owned businesses, and agriculture. Economists say the success of the loan will ultimately depend on effective deployment, with experts stressing that concessional borrowing can drive growth if tied to productive, revenue-generating sectors.
source: Punch