Nigeria Launches GuaranteeHer to Fund Women-Led MSMEs

The National Credit Guarantee Company (NCGC) has introduced GuaranteeHer, a credit guarantee for women, to boost financing for women-owned and women-led Micro, Small and Medium Enterprises (MSMEs) in Nigeria by over ₦100 billion within 5-years.

At the event, Minister of Women Affairs, Imaan Sulaiman-Ibrahim, hailed the launch as a game-changer and said that it tackles the perennial impediments to women getting formal credit.

She stressed the need for economic empowerment of women for the development of Nigeria, adding that the program would motivate financial Institutions to take calculated lending risks with the introduction of better credit guarantees.

The Minister of Information, proclaiming that “it is women o'clock in Nigeria”, appealed to stakeholders to develop policies and systems that will allow women to be successful entrepreneurs, employers, innovators and producers of wealth.

Tinuola Aigwedo, Executive Director, Strategy and Operations at NCGC said that in spite of their financial sovereignty and entrepreneurial spirit, women are still largely excluded from the financial system.

Key Highlights:

• NCGC launches GuaranteeHer to unlock ₦100 billion for women-led MSMEs in five years
• Covers up to 70% of loans, reducing lending risks and improving access to credit
• Starts with a 12-month pilot before expanding nationwide

She said that one out of every three women in Nigeria had no access to proper financial services, and women have more difficulties than men to access formal credit.

She said that GuaranteeHer was conceived for filling this financing gap, in order to establish a sustainable financing system that leverages partnerships to open up more affordable financing to women-led businesses, with financial institutions, development partners and catalytic capital providers.

The initiative is more than a financial inclusion program, it is a practical approach to transforming the economics of lending to women entrepreneurs,” said Dr. Bonaventure E. Okhaimo, Managing Director and Chief Executive Officer of NCGC.

He added that while the women entrepreneurs have historically proven to be innovative, resilient and have a solid re-payment history, they still do not access formal credit because of structural constraints like lack of adequate collateral, lack of formal documentation of their business and perceived risk of lending.

The program will minimise the risk of lending to financial institutions, decrease the cost of financing to women entrepreneurs and encourage private sector investment in women entrepreneurs, Okhaimo said.

He also encouraged women entrepreneurs to “expand into strategic sectors capable of driving Nigeria’s economic growth rather than remaining concentrated in traditionally underserved industries.”

The NCGC boss said GuaranteeHer aligns with Nigeria’s Financial Inclusion Strategy, National Gender Policy, MSME Development Agenda and the United Nations Sustainable Development Goals, adding that “expanding affordable finance for women-owned businesses would stimulate economic growth, create jobs and promote inclusive national prosperity.”

Under the framework, GuaranteeHer will provide participating financial institutions with credit guarantees covering up to 70 per cent of eligible lending portfolios.

The program also includes donor-backed first-loss funding, concessional financing, technical assistance and gender-focused impact measurement.

Participating financial institutions are expected to pass on the benefits of reduced lending risks to women entrepreneurs through lower interest rates, reduced collateral requirements, longer repayment periods and incentives for good repayment performance.

The initiative will begin with a 12-month pilot phase, during which selected financial institutions will deploy guaranteed lending portfolios valued between 5 billion and 10 billion before a nationwide expansion over the following five years.