The Arab Bank for Economic Development in Africa has officially signed a €40m (approximately N60bn) Line of Credit Facility Agreement with the Development Bank of Nigeria, designed to provide critical long-term financing to Micro, Small, and Medium-sized Enterprises across Nigeria.
The agreement, finalised during the IMF–World Bank Spring Meetings in Washington, D.C., is to address the perennial challenge of “patient capital”, affordable, long-term funding, which remains a significant hurdle for Nigerian entrepreneurs.
By channelling these funds through DBN’s participating financial institutions, the credit line will support productive investments in high-impact sectors including agriculture, manufacturing, health, and information technology.
Speaking on the vision behind the facility, the President of BADEA, Abdullah Almusaibeeh, emphasised the importance of reaching the grassroots of the economy:
He said, “This partnership with the Development Bank of Nigeria reflects BADEA’s firm commitment to supporting inclusive private sector-led growth in Africa.
By strengthening DBN’s capacity to reach MSMEs, women, and youth-led enterprises, this facility will help unlock productive investment and contribute to sustainable economic transformation in Nigeria.”
A standout feature of the agreement is its strict focus on financial inclusion. A significant portion of the credit line is earmarked for businesses led by women and young entrepreneurs, demographics that historically face the highest barriers to accessing formal credit in Nigeria’s banking sector.
The Managing Director/CEO of DBN, Tony Okpanachi, hailed the agreement as a catalyst for job creation and industrialisation.
He said, “This facility marks an important milestone in our collaboration with BADEA and will be instrumental in driving impactful investments and fostering long-term development. It strengthens our capacity to deepen access to finance for MSMEs, particularly women- and youth-led enterprises, while supporting job creation, economic diversification, and sustainable growth across Nigeria.
“We look forward to leveraging this partnership to deliver measurable impact and further advance our mandate of inclusive economic development.”
MSMEs are the backbone of the Nigerian economy, representing over 90 per cent of businesses and contributing nearly 50 per cent of the nation’s GDP. Despite their importance, the sector faces an estimated N13tn funding gap. With the Central Bank of Nigeria maintaining a hawkish monetary policy to combat inflation in 2026, commercial interest rates have remained high, making this €40m concessionary facility a vital alternative for small businesses.
Launched in 2017, the DBN operates as a “wholesale” lender. Rather than lending directly to the public, it provides high-volume, long-term funding to commercial banks and microfinance banks, which then on-lend to small businesses. This BADEA facility strengthens DBN’s balance sheet at a time when the federal government is aggressively pushing for non-oil export growth.
Based in Khartoum, Sudan, BADEA is a multilateral institution owned by 18 Arab League member states. This deal is part of the bank’s BADEA 2030 Strategy, which seeks to strengthen Afro-Arab cooperation. By investing in Nigeria, Africa’s most populous nation, BADEA is reinforcing its mandate to promote infrastructure and private sector competitiveness across sub-Saharan Africa.
The infusion of stable, long-term credit into sectors like power, energy, and real estate is expected to drive the “sustainable economic transformation” both institutions have pledged to deliver as Nigeria navigates its path toward economic diversification.
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