Sterling, Cascador launch $200m Nigerian SME loan fund

Nigerian lender Sterling Bank and growth-stage investor Cascador have launched a $200 million fund to help small and medium-sized enterprises (SMEs) access larger, longer-term bank loans.

The SME Credit Backstop Fund will cover a defined share of losses for participating lenders, a model the partners say could support up to $1 billion in outstanding credit.

It targets businesses that are ready to borrow but struggle to get debt because of tough collateral and guarantee demands.

“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,” said Trish Thomas, chief executive of Cascador.

“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 added.

Under the model, venture funds, studios and other ecosystem partners nominate businesses that meet the fund’s debt-readiness standards.

The fund then screens them using AI-powered underwriting and due diligence, and provides a backstop against losses for approved borrowers.

Lenders such as Sterling carry out their own assessment, approve and disburse the loans, and remain responsible for servicing, monitoring and collections.

SMEs will initially be able to borrow local currency loans equivalent to $250,000, with tenors matched to their cash flows. Loan sizes are expected to rise to $1 million once the fund is fully capitalised.

“Alongside the additional protection of the credit backstop, the initiative brings together businesses recommended by participating venture funds and studios that know these enterprises and have supported their development,” said Obinna Ukachukwu, group executive at Sterling Bank.

“This combines a stronger borrower pipeline with structured assessment and ongoing monitoring, giving us greater confidence to provide larger, longer-term loans,” he said.

The fund is seeking backing from philanthropic funders, impact investors and development finance institutions to build its guarantee reserve.

It will be run independently through Riverwell Platform Holding, a UK-owned company, with a Nigerian operating unit handling partner coordination, assessment and portfolio monitoring. Reserve capital will be held separately.

Mr Ukachukwu will sit on the Riverwell board.

The fund builds on a two-year pilot under Cascador’s Catalytic Fund, in which Cascador acted as nominator and guarantor and Sterling as lender.

The launch follows a Cascador white paper which found that only 22 per cent of businesses in sub-Saharan Africa hold a bank loan or line of credit, against a global average of 36 per cent.

Firms in the region rely more heavily on equity to fund growth than the global norm, reflecting the limited supply of suitable debt.

“Equity must work with debt and long-term securities to provide builders with the capital they need to build the future,” said Iyinoluwa Aboyeji, founding partner of Future Africa, which has backed more than 100 companies over 12 years.

Since 2019, Cascador has supported 80 ventures that have collectively raised more than $150 million. In 2025, its alumni served over 1.7 million customers and directly employed nearly 4,000 people.

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