Access vs Affordability: Rethinking MSME Financing in 2025

We often celebrate “access to finance” as the big win for small businesses. But let’s tell the truth: access without affordability is not progress, it’s a trap. In 2025, MSMEs in Nigeria are arguably closer to loans than ever before, but farther from financial breathing room. Why? Because what’s available is not always usable. Or safe.

Credit that’s too expensive, too rigid, or too complex is still exclusion. It’s just in a different uniform.

When Access Isn’t the Problem

Nigeria has introduced a wave of MSME-targeted finance programs. From the Development Bank of Nigeria disbursing over ₦787 billion to nearly 500,000 businesses in 2023, to the new syndicated loan and de-risking fund set for launch this year. Government and private institutions alike are moving. Platforms exist. Capital exists.

And yet, small business owners from Aba to Kogi still tell the same story: “We applied. We were approved. But we couldn’t take the loan. The interest rate would bury us.”

Most available loans still hover around 25–30% interest, with short tenors and stiff penalties. On paper, MSMEs are being served. In practice, they’re being priced out.

The Affordability Gap

Nigeria’s MSME financing gap remains around $32.2 billion. And it’s not just about a lack of funding, it's about the wrong kind of funding. Loans that are too expensive can stall growth, force businesses into informal borrowing cycles, or lead to premature closure.

In fact, a recent uptick in non-performing loans among micro-borrowers (above 5%) is a warning sign: access without affordability undermines productivity, not enhances it.

What Real Solutions Should Be

We don’t need more credit. We need smarter credit.

1. De-Risked Lending

The new MSME syndicated loan fund supported by the Nigerian government and the Central Bank of Nigeria (CBN) is a positive step in the right direction. The idea is simple, when multiple lenders come together to share the risk of giving loans, it becomes easier and safer for them to offer lower interest rates to small businesses.

Instead of one bank carrying all the risk, several financial institutions contribute to the fund. This way, they can spread the risk, making them more comfortable to lend to small and medium-sized businesses that might not have strong collateral or credit histories.

This kind of loan-sharing model has been successful in other parts of the world. It has helped reduce borrowing costs and improved access to finance for businesses that really need it. It can also work in Nigeria, especially if the fund is managed well—with clear rules, transparency, and accountability at every level.

If done properly, this fund can help thousands of Nigerian MSMEs grow without being trapped in high-interest debt. But success will depend on how well it's executed and whether all players involved stick to the plan and keep it fair and transparent.

2. Ethical Digitization

Digital lenders have made it faster and easier for people to get loans, especially through mobile apps. But while the speed has improved, the loan conditions are not always fair. In some cases, borrowers are charged extremely high interest rates, some as high as 300% when you calculate the full cost of the loan over time. That kind of borrowing quickly becomes a trap, not a solution.

But there are new ideas being tested that could make things better. For example, platforms like SympliFi are trying out a different approach. Instead of just using credit scores or harsh terms, they allow people in the Nigerian diaspora to act as guarantors for borrowers back home. This means the lender can trust the borrower more, and in return, offer better, more affordable loan terms.

It’s a smarter system that combines trust with fair pricing. It shows that innovation in lending doesn’t have to come at the cost of people’s financial wellbeing. It’s possible to use technology to help people, not exploit them.

It’s not just about giving out money quickly. It’s about making sure that the money helps people grow, rather than pulling them deeper into debt. We need more lenders and platforms to think this way if we’re serious about building a healthy financial future for everyday Nigerians.

3. Post-Loan Support Infrastructure

What happens after a loan is given out? That’s a question we don’t ask often enough. Getting the money is just the first step. But what comes next is just as important.

Do borrowers have the electricity they need to run their businesses? Do they have the right tools and machines? Can they easily access markets to sell their products or services? If the answer to these questions is no, then even the best loan won’t help a small business grow.

This is where shared support systems come in. For example, the Federal Government of Nigeria (FGN) and the Bank of Industry (BOI) have launched programs that provide shared workspaces, equipment, and infrastructure for small businesses. So far, over 120,000 MSMEs have used these shared facilities. That’s a strong sign that this kind of support works.

It shows that making loans more affordable isn’t just about offering low interest rates. It’s also about creating an environment where businesses have the things they need to succeed. This includes steady power supply, modern tools, digital access, and connections to customers.

When you combine affordable loans with real ecosystem support, small businesses stand a much better chance of surviving, growing, and hiring more people. If we want MSMEs to thrive, we need to stop thinking of lending as just a transaction and start seeing it as part of a larger system that must work together.

Let’s Redefine Progress

Access is step one. Affordability is the finish line. If we’re not moving businesses closer to that, we’re just shifting the burden from informal lenders to formal ones without reducing the weight.

If you’re in government, fund the de-risking pool and enforce rate transparency.
If you’re a lender, rethink your product for usability, not just compliance.
If you’re an MSME owner, ask more questions before you sign. Understand not just the amount, but the cost.

The future of MSME finance in Nigeria must be digital, yes. But above all, it must be affordable. Because when small businesses grow, they repay. And when they repay, the whole economy wins.