Cascador and Sterling Bank Launch $200 Million Fund to Expand SME Lending in Nigeria
The fund will share credit risk with lenders to encourage lending to businesses that are ready to borrow but struggle to secure financing. According to Cascador, the model could support up to $1 billion in outstanding credit capacity as the fund develops.
Nigeria’s Cascador accelerator has partnered with Sterling Bank to launch a $200 million SME Credit Backstop Fund aimed at helping small and medium-sized enterprises (SMEs) access larger and longer-term loans.
The fund will share credit risk with lenders to encourage lending to businesses that are ready to borrow but struggle to secure financing. According to Cascador, the model could support up to $1 billion in outstanding credit capacity as the fund develops.
Eligible businesses will initially be able to access local-currency loans worth up to $250,000, with the initiative targeting loans of up to $1 million when the fund is fully funded. The backstop capital is expected to come from philanthropic organisations, impact investors and development finance institutions.
Cascador Chief Executive Officer Trish Thomas said the fund would help businesses access financing by combining lender risk-sharing with recommendations from networks familiar with the businesses.
“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.”
– Trish Thomas, Chief Executive Officer, Cascador
Obinna Ukachukwu, Group Executive at Sterling Bank, said the initiative would combine referrals from venture funds and business studios with structured assessments and ongoing monitoring to support lending decisions.
“This combines a stronger borrower pipeline with structured assessment and ongoing monitoring, giving us greater confidence to provide larger, longer-term loans.”
– Obinna Ukachukwu, Group Executive, Sterling Bank
The initiative follows a pilot Catalytic Fund established by Cascador and Sterling Bank. Cascador says it has supported 80 ventures since 2019 and raised more than $150 million.
The fund will operate through Riverwell Platform Holding Limited and Riverwell Platform Services Nigeria, with reserve capital held separately. Ukachukwu will serve as a director on the Riverwell platform.
The launch comes amid financing challenges for African businesses. Citing its white paper, The Multiplier Model, Cascador says 22% of businesses in Sub-Saharan Africa have a bank loan or credit line, compared with a global average of 36%.
Through the credit backstop model, Cascador and Sterling Bank aim to expand access to debt financing for Nigerian businesses seeking capital to grow operations, scale their activities and create jobs.
