FEC Approves New $100m AfDB Concessional Loan for Youth-Owned MSMEs

On December 3, 2025, the Federal Executive Council, FEC, presided over by President Bola Tinubu, approved a $100 million AfDB concessional loan for Youth Owned MSMEs in Nigeria. This facility, which will be channeled through the Nigeria Youth Investment Fund, aims at entrepreneurs aged 18 to 35 years who operate micro, small, and medium-scale enterprises. Announcing the initiative, Minister of Finance and Coordinating Minister of the Economy Wale Edun said that such steps were in line with President Tinubu’s Renewed Hope Agenda, emphasizing inclusive growth, with the Q3 2025 GDP expanding at 3.89%, still way below the targeted 7% needed to lift millions of people from poverty. The approval comes on the heels of an initial commitment by the AfDB in October 2024 to establish the Nigeria Youth Entrepreneurship Investment Bank with $100 million, which marked a vital step toward operationalizing that visionary program.

The YEIB is an ecosystem convener, not a lender, and is co-anchored by the AfDB, Nigeria’s Ministry of Finance Incorporated, the NSIA, and DBN. It deploys the funds across three special-purpose vehicles: an Equity Investment Fund for high-growth startups; an Ecosystem Development Fund for technical assistance and capacity-building; and a Credit Guarantee Facility to mitigate lending risks for banks that finance youth ventures. This will be equity, debt, grants, and non-financial services such as business mentoring and market linkages, with a focus on youth-and women-led MSMEs active in priority sectors that include agriculture, digital technology, retail, and the creative industries. AfDB Director General for Nigeria, Dr. Abdul Kamara, said it is a “game-changer” in addressing the country’s youth unemployment challenge-estimated at 53% and affecting more than 80 million young Nigerians-and reducing gender gaps in business ownership. With the addition of DBN’s $25 million and NSIA’s $5 million, the seed capital has increased to $130 million, leveraging the AfDB’s investment.

MSMEs making up 96% of businesses and employing 84% of the workforce

This investment comes at a very strategic time when Nigeria’s economy needs it most: with MSMEs making up 96% of businesses and employing 84% of the workforce, they face acute financing barriers, while youth currently receive less than 5% of all formal credit due to a lack of collateral and high interest rates. The YEIB addresses such structural challenges as constrained venture capital access and skills gaps for young entrepreneurs, thus creating jobs and encouraging innovation in line with the AfDB Jobs for Youth in Africa Strategy, 2016–2025. Independent experts estimate this may unlock $6.4 billion in economic value given the connective programmes that flow from this, including the $614 million Investment in Digital and Creative Enterprises (iDICE), possibly generating more than 6 million jobs in the technology and creative sectors alone. Given its projected increase, the country’s digital economy is expected to contribute $180 billion to GDP by 2025, and $712 billion by 2050, making this loan potentially catalytic. It provides an avenue for the harnessed energy of a 70% youth demographic, aged 15–35 years, to drive sustainable development and ease migration pressures.

Broader continental efforts by AfDB

The rollout by YEIB consolidates broader continental efforts by AfDB, including YEIB pilots in other African countries, and complements similar parallel approvals by FEC, such as the $50 million Islamic Development Bank facility for Yobe State’s agricultural project. The challenges that remain include inflation and bottlenecks in implementation; affordability is assured by the concessional terms-low-interest and long-tenor. To the budding entrepreneur, this is a doorway to transformational support; applications, once the portal is fully launched, will be welcomed with priority given to innovative, scalable ideas. President Tinubu’s directive to the ministries for prioritization of capital projects that create jobs has this approval underscoring his administration’s renewed commitment to youth as Nigeria’s economic vanguard-turning potential into prosperity for generations to come.