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The World Bank has approved a $500 million facility for Nigeria to expand longer-term lending to small and medium sized businesses, a sector which often struggles with access to credit.
The facility, which will be managed by the Development Bank of Nigeria, will also involve partial credit guarantees “so that lenders can extend credit to businesses they might otherwise consider too risky,” the World Bank said in a press release.
Small and medium sized firms make up 97% of all businesses in Nigeria, accounting for 88% of employment and nearly half of economic output, according to the nation’s statistics agency. Still, fewer than one in 20 of the smaller companies have access to bank credit, and loans to the sector are often short‑term and costly, the World Bank said.
The facility will help mobilize about $1.89 billion iin private capital, and expand financing for 250,000 of the firms, including at least 150,000 businesses led by women, according to the World Bank. It will issue up to $800 million in guarantees to catalyse lending, the global lender added.
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