• Proparco grants 9 billion naira guarantee to support MSME lending
• Risk-sharing tool could unlock up to 18 billion naira in loans over two years
• Move comes as only 5% of Nigeria’s 37 million small firms access bank credit

Proparco, the private sector arm of the AFD Group, granted Nigerian lender Wema Bank a 9 billion naira (about $6 million) portfolio guarantee last week to ease access to credit for micro, small and medium-sized enterprises (MSMEs).

The guarantee, provided through AFD’s ARIZ risk-sharing instrument, covers 50% of the final loss risk on eligible loans. Under the arrangement, Wema Bank can build a loan portfolio of up to 18 billion naira for Nigerian MSMEs over two years, targeting businesses that often struggle to secure funding through traditional banking channels.

The financing will focus on strategic sectors of Nigeria’s economy, including agriculture, health care, education, pharmaceuticals and green finance. Short-term credit lines will also be deployed to cover companies’ working capital needs.

“By sharing risk with Wema Bank, we are helping to increase financing volumes for Nigerian MSMEs,” said Xavier Echasseriau, Proparco’s regional director for Nigeria. He described the operation as addressing a major challenge: supporting entrepreneurship and job creation in a country marked by rapid population growth and significant financing needs. He added that the partnership, the first between Proparco and Wema Bank, is part of a long-term strategy.

The initiative comes as Nigerian MSMEs, like many across Africa, continue to face limited access to finance. According to the European Investment Bank, citing data from the Development Bank of Nigeria, only 5% of the country’s 37 million micro and small enterprises — which account for about 50% of GDP — have access to bank credit.

In 2025, the Nigerian government launched the National Credit Guarantee Company Limited (NCGC), with an initial capital base of 100 billion naira. The institution aims to reduce lending risks and expand access to financing for MSMEs, industrial firms and large companies.

SG