Nigeria moves to secure $500 million World Bank loan for MSME financing

The loan is primarily intended to expand credit availability via the Development Bank of Nigeria (DBN) and its subsidiary, Impact Credit Guarantee Limited, according to a project document acquired from the World Bank.

“The proposed FINCLUDE Project leverages the platforms of the Development Bank of Nigeria and its subsidiary, the Impact Credit Guarantee Limited, to drive inclusive MSME finance,” the World Bank 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,” the global lender added.

The World Bank will disburse $500 million of the program’s projected $2.39 billion total cost.

Also, the International Bank for Reconstruction and Development is set to add $400 million to the program, while the International Development Association will contribute $100 million.

The two main lending divisions of the World Bank Group are the International Development Association (IDA) and the International Bank for Reconstruction and Development (IBRD), as seen in the Punch.

The IDA concentrates on the world’s poorest countries by providing concessional financing and grants funded by donor contributions rather than commercial borrowing.

At the same time, the IBRD offers loans on near-market terms to middle-income and credit-worthy low-income countries.

“DBN is 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 World Bank stated.

The three components of the project —innovative and inclusive MSME finance products, de-risking and private capital mobilization through partial credit guarantees, and technical support for modernizing and digitizing the MSME finance ecosystem —are expected to be approved on December 18, 2025.

“These reforms have improved fiscal space, enhanced FX liquidity, and eased inflation to 18 per cent as of September 2025. Growth prospects are strengthening, with the IMF projecting 3.9 per cent real GDP growth in 2025,” the World Bank stated.