The World Bank has approved a $500 million financing package to expand access to finance for micro, small, and medium enterprises in Nigeria under the Fostering Inclusive Finance for MSMEs in Nigeria project.
In a press release issued by the World Bank in Nigeria on Saturday, the global lender announced that the approval encompasses a $400 million loan from the International Bank for Reconstruction and Development and a $100 million credit from the International Development Association to the Federal Republic of Nigeria.
The statement noted that the project, known as FINCLUDE, will be implemented by the Development Bank of Nigeria, with credit guarantees to be delivered through its subsidiary, Impact Credit Guarantee Limited.
“The World Bank today approved the Fostering Inclusive Finance for MSMEs in Nigeria project, a $500m financing package to the Federal Republic of Nigeria.
“The operation comprises a $400m International Bank for Reconstruction and Development loan and a $100m International Development Association credit and will be implemented by the Development Bank of Nigeria, with credit guarantees delivered through DBN’s subsidiary, Impact Credit Guarantee Limited,” the statement read.
According to the World Bank, Nigeria’s MSMEs account for most businesses in the country, contribute nearly half of gross domestic product, and provide a large share of jobs, but continue to face persistent barriers in accessing formal finance.
The institution said fewer than one in twenty MSMEs have access to bank credit, while available loans are often short-term, expensive, and dependent on collateral requirements that exclude many viable firms.
(Punch)
