The Dutch Entrepreneurial Development Bank (FMO) and Nigeria’s First City Monument Bank (FCMB) have signed a $25 million NASIRA guarantee agreement.

The guarantee will enable FCMB to expand its funding to agriculture, youth, and women-owned SMEs without requiring collateral, targeting a client group typically deemed too risky by banks.

Funded by the European Commission, NASIRA is one of FMO’s most innovative programs, encouraging local banks to extend their funding to small entrepreneurs without collateral. Often, the FMO guarantee – that effectively replaces the collateral – is not fully utilized, demonstrating that these entrepreneurs, primarily women and young people, are not riskier than others.

In addition to the $25million NASIRA guarantee, FMO will support FCMB with a syndicated loan of $60 million, comprising $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).

Speaking during the signing ceremony at the side-lines of the ninth Nigeria EU Business Forum, the EU Ambassador to Nigeria and ECOWAS Ms. Samuela Isopi, 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”.

The transaction also contains a technical assistance program. Through this 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 problems in the agricultural sector, contributing to SDG2: zero hunger and food security.