Nigeria seeks $500m World Bank loan to boost MSME access to credit under the FINCLUDE Project through the Development Bank of Nigeria

Nigeria has seeks $500m World Bank loan to expand access to finance for micro, small, and medium enterprises under a new initiative titled Fostering Inclusive Finance for MSMEs in Nigeria (FINCLUDE) Project.

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According to a document obtained from the World Bank, the proposed facility aims to mobilise private capital and promote innovative financial products tailored for small businesses.

The loan, valued at $500m, will be channelled through the Development Bank of Nigeria (DBN) and its subsidiary, Impact Credit Guarantee Limited, to deepen credit access and strengthen the small business ecosystem.

“The proposed FINCLUDE Project leverages the platforms of the Development Bank of Nigeria and its subsidiary to drive inclusive MSME finance,” the World Bank said.

“It will deploy complementary, innovative instruments suited to the diverse needs of Nigerian enterprises.”

The project’s total cost is estimated at $2.39bn, with the World Bank contributing $400m through the International Bank for Reconstruction and Development and $100m via the International Development Association.

The remaining $1.89bn will come from private lenders as unguaranteed financing.

The Federal Government will serve as the borrower, while the DBN will manage implementation. The World Bank described DBN as “a trusted partner with high implementation capacity and a strong record in executing innovative projects.”

Expected to be approved by December 18, 2025, the FINCLUDE Project will focus on three major areas — expanding MSME finance, de-risking lending through credit guarantees, and providing technical assistance to modernise and digitise Nigeria’s small business finance ecosystem.

Under the initiative, eligible financial institutions will receive additional capital and support to create an MSME investment fund that provides long-term funding and equity to small enterprises.

The World Bank noted that the project would crowd-in private capital, foster innovation, and enhance financial sustainability, while also providing targeted capacity-building support for lenders and regulators.

The bank’s appraisal report described Nigeria as being “in a critical transition,” crediting recent economic reforms — such as the removal of fuel subsidies and unification of exchange rates — with improving fiscal space and investor confidence.

Despite these gains, access to finance remains limited, particularly for small businesses, women, and the agricultural sector, which accounts for just over 5% of total bank credit.

If approved, FINCLUDE would be the latest in a growing list of World Bank-supported programmes in Nigeria.

As of June 2025, the country’s external debt stood at $46.98bn, with the World Bank Group accounting for $19.39bn, representing over 41% of the total.

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Observers say the Nigeria seeks $500m World Bank loan move signals renewed efforts by the government to empower entrepreneurs, stimulate job creation, and strengthen the foundations of inclusive economic growth.