Sterling Bank and Cascador launch a $200m SME Credit Fund designed to unlock up to $1bn in loans for growing Nigerian businesses.
Fund Targets $1bn in Loans for Nigerian Businesses
Sterling Bank and Cascador have launched a $200 million SME Credit Backstop Fund to help Nigerian businesses access more loans. The initiative aims to support up to $1 billion in outstanding loans through a risk-sharing model.
Announced in Lagos on Wednesday, the fund targets established small and medium-sized enterprises (SMEs) with proven business growth. It will help eligible businesses secure larger loans with longer repayment periods. This could help them expand operations, buy equipment, create jobs, and grow their businesses.
However, the fund will not lend directly to businesses. Instead, it will protect participating lenders against some potential credit losses, encouraging them to provide more financing.
Fund Tackles SME Financing Challenges
The initiative addresses a major challenge facing African businesses: limited access to suitable debt financing.
According to Cascador’s white paper, The Multiplier Model, only 22 per cent of businesses in Sub-Saharan Africa have bank loans or credit lines. The global average stands at 36 per cent. Consequently, many African businesses depend heavily on equity to fund their growth.
The new fund aims to change this by helping businesses move from early-stage investment to commercial borrowing. Its $200 million backstop will support a lending model designed to unlock up to $1 billion in credit.
Cascador CEO Highlights Nigeria’s Business Potential
Cascador Chief Executive Officer Trish Thomas said Nigeria had enormous entrepreneurial potential but lacked suitable funding options for growing businesses.
“Nigeria is rich in entrepreneurial talent and innovation, and yet their potential is constrained by lack of access to capital that matches where they are and what they are trying to achieve,” Thomas said.
She added that the fund would create a practical route to debt financing for businesses with proven commercial traction.
“By sharing risk with lenders and translating community trust into a bankable signal to lend, the fund can help more businesses access what they need to scale and create jobs,” she noted.
Sterling Bank, Cascador Bring Partners Together
Sterling Bank will contribute its lending infrastructure and credit expertise, while Cascador will draw on its experience supporting businesses with growth potential.
The initiative will also involve venture funds, business studios, financial institutions, philanthropic organisations, impact investors, and development finance institutions. Together, these partners will help strengthen the fund’s risk-sharing framework and encourage additional SME lending.
Sterling Bank Group Executive Obinna Ukachukwu said the partnership would combine credit protection with stronger borrower screening and monitoring. He added that recommendations from venture funds and studios could help lenders assess businesses more confidently.
Ultimately, the initiative aims to help proven Nigerian businesses secure the capital they need to expand and create jobs.
