Nigeria to Secure $500m World Bank Loan for MSME Development

The Federal Government of Nigeria is expected to secure a $500m loan facility from the World Bank on December 19, 2025, under the Fostering Inclusive Finance for MSMEs in Nigeria project. This loan will be implemented through the Development Bank of Nigeria and aims to support the growth of micro, small, and medium-sized enterprises (MSMEs) in the country.

iSince President Bola Tinubu took office, Nigeria has received significant funding from the World Bank. In 2023, the country secured $2.7 billion in loans across four major projects, including power sector recovery, renewable energy access, girls’ education, and women’s economic empowerment. The loan volume increased sharply in 2024, with new approvals reaching $4.25 billion, representing a 57.4% increase compared to the previous year .

The World Bank loans to Nigeria from 2023 to 2025 are projected to reach $9.65 billion, with grants adding another $122.19 million. The loans are allocated to various sectors, including:

Renewable energy and power sector recovery: $750m IDA financing for the Nigeria Distributed Access through Renewable Energy Scale-up project and $449m IBRD financing and $301m IDA for the AF Power Sector Recovery operation.
Education:$700m IDA credit for girls’ secondary education in participating states and $500m IDA for basic education.
Health: $500m IDA for primary healthcare strengthening and $630m for health security, nutrition, and internally displaced communities.
MSME finance:$400m IBRD component and $100m IDA portion for the MSME finance programme.Digital infrastructure: $500m IDA for broadband expansion .

The loan is expected to have a positive impact on Nigeria’s economy, particularly in the MSME sector. However, economists warn that the rising loan pipeline could deepen fiscal pressures if not matched with stronger domestic revenue mobilization and prudent expenditure management.