Key Takeaways
- • Cascador, a Lagos-based accelerator for growth-stage entrepreneurs, and Sterling Bank have launched a $200 million SME Credit Backstop Fund for Nigerian small and medium-sized enterprises.
- • The independent risk-sharing vehicle provides a defined credit backstop supporting up to $1 billion in outstanding credit capacity.
- • The fund is designed to create a structured pathway to larger, longer-term loans and reduced collateral requirements for debt-ready SMEs.
- • Cascador's white paper 'The Multiplier Model' found only 22% of businesses across sub-Saharan Africa hold a bank loan or line of credit, versus a 36% global average.
Summary
Cascador, a Lagos-based accelerator for growth-stage entrepreneurs, has partnered with Sterling Bank to launch a $200 million credit backstop fund targeting Nigerian small and medium-sized enterprises (SMEs), according to Africa Private Equity News. Several other outlets reported the launch in similar terms, describing it as aimed at expanding access to growth capital for Nigerian SMEs.
The SME Credit Backstop Fund is structured as an independent risk-sharing enterprise. It provides a defined credit backstop that supports up to $1 billion in outstanding credit capacity, and is intended to create a structured pathway to larger, longer-term loans for debt-ready SMEs. The structure also contemplates reduced collateral requirements for eligible borrowers.
Cascador said that in its experience working with Nigerian founders, access to tailored or suitable capital is a common obstacle. A newly published Cascador white paper, 'The Multiplier Model', found that only 22% of businesses across sub-Saharan Africa hold a bank loan or line of credit, compared with a 36% global average. The company said this limited access to suitable debt financing has held back high-potential businesses from scaling.
The announcement positions the fund as a risk-sharing mechanism for participating finance partners, with the backstop intended to support lending to SMEs that would otherwise lack access to larger credit facilities.
The SME Credit Backstop Fund is structured as an independent risk-sharing enterprise. It provides a defined credit backstop that supports up to $1 billion in outstanding credit capacity, and is intended to create a structured pathway to larger, longer-term loans for debt-ready SMEs. The structure also contemplates reduced collateral requirements for eligible borrowers.
Cascador said that in its experience working with Nigerian founders, access to tailored or suitable capital is a common obstacle. A newly published Cascador white paper, 'The Multiplier Model', found that only 22% of businesses across sub-Saharan Africa hold a bank loan or line of credit, compared with a 36% global average. The company said this limited access to suitable debt financing has held back high-potential businesses from scaling.
The announcement positions the fund as a risk-sharing mechanism for participating finance partners, with the backstop intended to support lending to SMEs that would otherwise lack access to larger credit facilities.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.