DBN secures €40m BADEA credit line to expand MSME financing in Nigeria

Washington DC|| The Development Bank of Nigeria (DBN) has secured a 40 million euros line of credit from the Arab Bank for Economic Development in Africa (BADEA), strengthening its capacity to channel long-term funding to small businesses and deepen financial inclusion in Africa’s most populous nation.

The agreement, signed on the sidelines of the IMF–World Bank spring meetings in Washington on wednesday, underscores growing cooperation between regional development finance institutions seeking to cushion vulnerable economies and unlock private sector growth amid tighter global financial conditions.

The facility will be deployed through eligible financial institutions, enabling them to extend longer-tenor loans to micro, small and medium-sized enterprises, a segment widely seen as critical to job creation and economic diversification in Nigeria. Access to affordable credit remains a persistent constraint for smaller firms in the country, where high borrowing costs and limited risk appetite among commercial lenders have curtailed expansion.

“This partnership with the Development Bank of Nigeria reflects BADEA’s firm commitment to supporting inclusive private sector-led growth in Africa,” Abdullah Almusaibeeh, BADEA President said at the signing ceremony. “By strengthening DBN’s capacity to reach MSMEs, women, and youth-led enterprises, this facility will help unlock productive investment.”

Nigeria’s development finance architecture has increasingly leaned on such partnerships to bridge funding gaps, particularly as global shocks — from the pandemic to geopolitical tensions — have tightened liquidity and raised debt vulnerabilities across emerging markets.

The DBN, which operates as a wholesale lender, provides financing and guarantees to commercial banks, which then on-lend to businesses.

The new credit line is expected to support lending across a range of priority sectors, including agriculture, manufacturing, energy, education and technology, aligning with broader efforts to reduce Nigeria’s dependence on oil and build a more resilient, diversified economy.

“This facility marks an important milestone in our collaboration with BADEA,” Tony Okpanachi, DBN Chief Executive Officer said. “It strengthens our capacity to deepen access to finance for MSMEs, particularly women- and youth-led enterprises, while supporting job creation and sustainable growth.”

A key focus of the program will be expanding access to finance for underserved groups, including female entrepreneurs and young business owners, who face disproportionately higher barriers in securing credit.

DBN estimates that a significant share of its existing portfolio already supports youth-led enterprises, reflecting demographic realities in a country where the median age is under 20.

The deal also highlights BADEA’s broader push to scale up its footprint across sub-Saharan Africa, where it has been increasing support for infrastructure, industrialisation and private sector competitiveness.
The institution, backed by 18 member states from the Arab world, has sought to position itself as a strategic partner in bridging development financing gaps across the continent.

For Nigeria, the additional funding comes at a time when policymakers are seeking to stimulate growth while managing fiscal pressures and currency volatility. Expanding credit to smaller firms is seen as a cornerstone of that strategy, given their outsized role in employment and innovation.

“We look forward to leveraging this partnership to deliver measurable impact and further advance our mandate of inclusive economic development,” Okpanachi said.