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The World Bank has approved a $500 million loan to Nigeria to boost access to finance for micro, small, and medium enterprises (MSMEs) through the Fostering Inclusive Finance for MSMEs in Nigeria (FINCLUDE) Project. This project aims to mobilize private capital and promote innovative financial products for small businesses, leveraging the Development Bank of Nigeria (DBN) and its subsidiary, Impact Credit Guarantee Limited.
The $500 million financing package includes $400 million from the International Bank for Reconstruction and Development (IBRD) and $100 million from the International Development Association (IDA). The project is expected to mobilize $1.89 billion in private capital and provide debt financing to 250,000 MSMEs, with at least 150,000 women-led businesses and 100,000 agribusinesses benefiting.
The FINCLUDE project focuses on three main areas: inclusive finance products, de-risking and mobilizing private capital, and technical assistance. It will provide Tier 2 subordinated capital to eligible financial institutions and establish an MSME investment fund. The project will also scale partial credit guarantees to encourage lending to high-risk MSMEs.
The project is expected to have a significant impact on Nigeria’s economy, creating jobs and promoting economic growth. MSMEs are crucial to Nigeria’s economic development, but they face significant challenges accessing finance. The FINCLUDE project aims to address this issue and unlock the potential of MSMEs.
The World Bank’s Country Director for Nigeria, Shubham Chaudhuri, emphasized the importance of the project, stating that it will help address the critical financing gap faced by MSMEs and support Nigeria’s economic diversification efforts. The project is aligned with Nigeria’s National Development Plan 2021-2025 and the World Bank’s Country Partnership Framework for Nigeria.The FINCLUDE project is a significant step towards promoting inclusive finance and economic growth for the nation.
