Nigeria Secures N60bn Credit Facility from Arab Bank to Support Small Businesses
- BADEA has signed a N60 billion credit facility with the Development Bank of Nigeria (DBN) to improve access to long-term financing for MSMEs
- The fund will be channelled through financial institutions to support different sectors with a strong focus on women- and youth-led businesses
- The initiative aims to help bridge Nigeria’s estimated N13 trillion MSME funding gap, boost job creation, and drive economic diversification
Legit.ng journalist Victor Enengedi has over a decade's experience covering energy, MSMEs, technology, banking and the economy
The Arab Bank for Economic Development in Africa (BADEA) has entered into a €40 million (about N60 billion) line of credit agreement with the Development Bank of Nigeria (DBN) to expand access to long-term financing for micro, small, and medium-sized enterprises (MSMEs) nationwide.
The deal was concluded on the sidelines of the International Monetary Fund (IMF) and World Bank Spring Meetings in Washington, D.C., and is aimed at addressing the persistent shortage of affordable, long-term funding—often described as “patient capital”—that continues to limit business growth in Nigeria.
Source: UGC
Under the arrangement, the funds will be disbursed through DBN’s network of participating financial institutions, targeting critical sectors such as agriculture, manufacturing, healthcare, and information technology, Punch reported.
BADEA President, Abdullah Almusaibeeh, said the initiative underscores the bank’s commitment to inclusive, private sector-driven growth across Africa.
He noted that strengthening DBN’s ability to support MSMEs, particularly those led by women and young entrepreneurs, would stimulate investment and drive sustainable economic transformation.
Strong emphasis on financial inclusion
A key component of the facility is its focus on expanding financial inclusion. A substantial share of the funding is reserved for businesses owned or managed by women and youth—groups that often face significant challenges in accessing formal credit in Nigeria.
DBN’s Managing Director and Chief Executive Officer, Tony Okpanachi, described the agreement as a major step toward boosting job creation and industrial development.
According to him, the funding will enhance DBN’s capacity to provide accessible financing, promote economic diversification, and support long-term growth.
Bridging Nigeria’s MSME funding gap
MSMEs account for more than 90% of businesses in Nigeria and contribute nearly half of the country’s gross domestic product.
However, the sector is constrained by an estimated N13 trillion financing gap, worsened by high lending rates linked to the Central Bank of Nigeria’s tight monetary stance aimed at curbing inflation.
Established in 2017, DBN operates as a wholesale development finance institution, providing large-scale funding to commercial and microfinance banks for onward lending to small businesses.
The new credit facility is expected to strengthen its funding base as the federal government intensifies efforts to boost non-oil exports.
Headquartered in Khartoum, Sudan, BADEA is a multilateral development finance institution backed by 18 member countries of the Arab League.
The partnership with DBN aligns with its BADEA 2030 Strategy, which seeks to deepen economic cooperation between Arab nations and Africa while promoting private sector development and infrastructure growth across the continent.
Source: Getty Images
CAC offers free registration for 3,500 SMEs
Meanwhile, Legit.ng earlier reported that the Corporate Affairs Commission (CAC) announced a fresh initiative aimed at easing the burden on small business owners across Nigeria.
Under the new programme, 3,500 small enterprises will enjoy free business name registration, covering all 36 states and the Federal Capital Territory.
According to the CAC, the intervention is designed to lower the cost of formalising businesses and encourage more entrepreneurs to operate within the formal economy.
Source: Legit.ng
