In a move aimed at bolstering Nigeria’s economic landscape, the Dutch Entrepreneurial Development Bank (FMO) and First City Monument Bank (FCMB) have inked a transformative $25 million NASIRA guarantee agreement. This initiative, funded by the European Commission, marks a pivotal step towards supporting agricultural ventures, youth initiatives, and women-owned small and medium enterprises (SMEs) in Nigeria, without the traditional requirement of collateral.
The NASIRA program, renowned for its innovative approach, empowers local banks to extend financial support to entrepreneurs typically considered too risky for conventional loans. This agreement highlights a strategic effort to stimulate job creation amidst Nigeria’s daunting economic challenges, including high unemployment rates and currency depreciation.
In addition to the $25 million NASIRA guarantee, FMO is set to bolster FCMB’s efforts with a substantial syndicated loan totaling $60 million. $20 million through FMO, $30 million through the European Financing Platform on behalf of BIO, DEG, EIB, FINNFUND, Proparco, and SWEDFUND, and $10 million through FMO Investment Management. The loan is dedicated to growing the existing FCMB loan portfolio of small and medium-sized entrepreneurs (SMEs).
The signing ceremony, held during the 9th Nigeria EU Business Forum, saw notable endorsements from EU Ambassador to Nigeria and ECOWAS, Ms. Samuela ISOPI. She noted the EU’s commitment to leveraging private sector investments through instruments like the European Fund for Sustainable Development (EFSD+).
She said, “We are very happy to see that the EU investment instruments, such as the European Fund for Sustainable Development (EFSD+) guarantees, have come to Nigeria to play a catalytic role in leveraging private sector investments for the benefit of the real sector, economic diversification and employment creation, especially for youth and women”.
Furthermore, the agreement includes a technical assistance (TA) component aimed at nurturing early-stage agri-tech ventures in Nigeria. Through this initiative, FMO and FCMB will identify and support 15 promising agri-tech startups in Nigeria. Together, FMO and FCMB will identify 15 disruptive business models that address pressing problems in the agricultural sector, contributing to SDG2: zero hunger and food security.
NASIRA, launched in 2020 with support from the European Commission and the Dutch government, has facilitated over $371 million across 17 transactions in Central Europe, the Middle East, and Africa. It stands as a testament to international collaboration in empowering entrepreneurs and fostering inclusive economic growth.
FMO, the Dutch entrepreneurial development bank, is recognised as a leading impact investor and remains committed to advancing 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 50+ year proven track-record in empowering entrepreneurs to make local economies more inclusive, productive, resilient and sustainable. FMO focuses on three sectors that have high development impact: Agribusiness, Food & Water, Energy, and Financial Institutions. With a total committed portfolio of €13 billion spanning over 85 countries, FMO is one of the larger bilateral private sector development banks globally.
FCMB, a pivotal player within the Nigerian financial landscape, reaffirmed its commitment to driving inclusive growth by connecting people, capital, and markets. As part of FCMB Group Plc, the bank remains dedicated to fostering a supportive ecosystem that drives economic prosperity across Africa.
The European Fund for Sustainable Development (EFSD+), is one of the financing tools of Global Gateway, promoting sustainable investments in the European Union’s (EU) partner countries.
By leveraging public funding to attract private investments, the EFSD aims to foster sustainable development, create jobs, and address root causes of migration. It supports projects in critical areas such as renewable energy, infrastructure, digitalisation, and small and medium enterprises (SMEs), utilising financial instruments like guarantees and blending to de-risk investments and promote economic growth and stability.
This collaborative effort between FMO, FCMB, and the European Commission not only signifies a commitment to economic empowerment but also sets a precedent for impactful investment in Nigeria’s entrepreneurial future.
Chioma Kalu
Follow us on:
