In a major move to unlock funding for small businesses, the National Credit Guarantee Company (NCGC) and the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) have officially signed a Memorandum of Understanding (MoU).The partnership creates a stronger framework to tackle the financing challenges facing Nigeria’s micro, small, and medium enterprises (MSMEs)—especially nano and micro-businesses.
The two organizations will work together to improve the creditworthiness of small businesses, promote financial literacy, and offer robust credit guarantees to encourage commercial banks to lend to smaller brands.De-Risking Private Sector Lending via Credit Guarantees A primary barrier preventing Nigerian small businesses from securing bank loans is the lack of acceptable collateral. NCGC addresses this friction by providing credit guarantees that act as a safety net for financial institutions, absorbing a significant portion of the risk if a borrower defaults.
During the signing ceremony, the MD/CEO of NCGC, Dr. Bonaventure Okhaimo, highlighted the company’s track record in de-risking the local private sector:
Total Facilitated Credit: Over ₦32.78 billion in capital unlocked for local enterprises.
Guarantees Issued: More than ₦13.09 billion provided directly to partner financial institutions.
Beneficiary Reach: 1,478 businesses and entrepreneurs successfully financed.
Job Creation: At least 1,682 jobs created or preserved across multiple economic sectors.
Expanding Reach to Nano and Micro-EnterprisesThe Director-General of SMEDAN, Mr. Charles Odii, noted that the alliance will allow SMEDAN to leverage these structural financial guarantees to expand its support across the country.
Beyond matching businesses with capital, the initiative will launch coordinated stakeholder engagement forums, knowledge-sharing platforms, and nationwide awareness campaigns. These programs aim to educate small retailers, local manufacturers, and consumers on how to use credit guarantees to scale up their operations safely.
