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The Netherlands 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 financing to farmer, youth and women-owned SMEs without requiring collateral, targeting a client group that banks typically consider too risky.
Funded by the European Commission, NASIRA is one of the most innovative FMO programmes, encouraging local banks to extend their funding to small entrepreneurs without collateral. Often, FMO guarantees – which effectively replace collateral – are not fully utilized, suggesting that these entrepreneurs, especially women and young people, are no more at risk than others.
Job creation in Nigeria, home to 220 million people and Africa’s largest population, is critical. The country faces significant economic challenges, including high unemployment and a significant depreciation of its currency of 70% over the past year. Providing small loans to groups that are typically at high risk will enable them to start and expand their businesses, providing a source of income for themselves and their families.
In addition to the USD 25 million NASIRA guarantee, FMO will support FCMB with a USD 60 million syndicated loan: USD 20 million through FMO, USD 30 million through the European Financing Platform on behalf of BIO, DEG, EIB, FINFUND, Proparco, and SWEDFUND, and USD 10 million through FMO Investment Management. The loan is dedicated to expanding FCMB’s existing loan portfolio for small and medium-sized enterprises (SMEs).
Speaking during the signing ceremony on the sidelines of the 9th Nigeria EU Business Forum, EU Ambassador to Nigeria and ECOWAS Ms. Samuela ISOPI said, “We are very pleased to see that EU investment instruments, such as the European Fund for Sustainable Development (EFSD+) guarantee, have come to Nigeria to play a catalytic role in harnessing private sector investment for the benefit of the real sector, economic diversification and job creation, especially for youth and women”. The transaction also includes a technical assistance (TA) programme. Through this TA initiative, FCMB and FMO will select and support 15 scalable early-stage agri-tech businesses in Nigeria. Together, FMO and FCMB will identify 15 disruptive business models that address pressing issues in the agricultural sector, contributing to SDG2: zero hunger and food security.
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About Nasira
Launched in August 2020, NASIRA is a collaborative effort supported by the European Commission and the Dutch government. To date, NASIRA has facilitated 17 transactions with financial institutions across Central Europe, the Middle East and Africa, totaling USD 371 million. For more information, please visit www.fmo.nl/nasira
About FMO
FMO is the Dutch entrepreneurial development bank. As a leading impact investor, FMO supports sustainable private sector growth in developing countries and emerging markets by investing in ambitious projects and entrepreneurs. FMO believes that a strong private sector leads to economic and social development and has a proven track record of 50+ years in empowering entrepreneurs to make local economies more inclusive, productive, resilient and sustainable. FMO focuses on three sectors with high development impact: Agribusiness, Food & Water, Energy and Financial Institutions. With a total committed portfolio of EUR ~13 billion covering over 85 countries, FMO is one of the larger bilateral private sector development banks globally. For more information: please visit www.fmo.nl
About FCMB
First City Monument Bank, part of FCMB Group Plc, is committed to driving inclusive and sustainable growth in its communities by building a supportive ecosystem rooted in Africa (especially Nigeria), connecting people, capital and markets.
About EFSD+
The European Fund for Sustainable Development (EFSD+) is one of the Global Gateway’s financing instruments that promotes sustainable investment in the European Union (EU) partner countries. By leveraging public finance to attract private investment, EFSD aims to promote sustainable development, create jobs and address the root causes of migration. The fund supports projects in critical areas such as renewable energy, infrastructure, digitalization and small and medium-sized enterprises (SMEs), using financial instruments such as guarantees and blending to reduce investment risks and promote economic growth and stability.
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