The Dutch Entrepreneurial Development Bank (FMO) and Nigeria’s First City Monument Bank (FCMB) today signed a $25 million NASIRA guarantee agreement. The guarantee will enable FCMB to expand its funding to agricultural, youth, and women-owned SMEs without requiring collateral, targeting a client group typically deemed too risky by banks.
Funded by the European Commission, NASIRA is one of FMO’s most innovative programs, encouraging local banks to extend their funding to small entrepreneurs without collateral. Often, the FMO guarantee – that effectively replaces the collateral – is not fully utilized, demonstrating that these entrepreneurs, primarily women and young people, are not riskier than others.
Job creation in Nigeria, home to 220 million people and the largest population in Africa, is critical. The country faces severe economic challenges, including high unemployment and a significant 70% depreciation of its currency over the past year. Providing small loans to typically high-risk groups will enable them to start and expand their businesses, offering a means of income for themselves and their families.
