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Cascador and Sterling Bank have launched a $200 million SME Credit Backstop Fund to help small and medium-sized businesses in Nigeria get loans.
The fund won’t lend money directly. Instead, it will help lenders by covering some of their losses if borrowers don’t repay. The partners believe this model can support up to $1 billion in loans. It’s designed to help businesses access larger, long-term loans with less collateral needed.
“Nigeria is rich in entrepreneurial talent and innovation and yet their potential is constrained by lack of access to capital that matches where they are and what they are trying to achieve. 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,” said Trish Thomas, CEO of Cascador.
Cascador has launched a new fund following their whitepaper, “The Multiplier Model,” which discusses the challenges faced by African businesses in growing. This new fund builds on the Catalytic Fund that Cascador and Sterling tested for two years.
In that pilot, Cascador selected borrowers and guaranteed loans, while Sterling provided the funds. The new fund will operate independently, allowing more partners from the startup community to get involved.
Cascador is a Nigeria-focused platform for growth-stage founders. Through its flagship programme: Cascador ScaleUp, it works with a small group of entrepreneurs on leadership and strategy.
ScaleUp alumni can access the Catalytic Fund, which puts up to $5 million a year into companies through a mix of debt and equity. Since 2019, Cascador has supported 80 companies that have raised over $150 million between them. In 2025, its alumni served more than 1.7 million customers and employed almost 4,000 people.
Obinna Ukachukwu, Group Executive at Sterling Bank, said, “Alongside the additional protection of the credit backstop, the initiative brings together businesses recommended by participating venture funds and studios that know these enterprises and have supported their development. This combines a stronger borrower pipeline with structured assessment and ongoing monitoring, giving us greater confidence to provide larger, longer-term loans.”
Sterling Bank is a national commercial bank in Nigeria and a member of Sterling Financial Holdings Group. It has a history of more than 60 years and offers retail, commercial and corporate banking. Its HEART strategy focuses on health, education, agriculture, renewable energy and transportation.
Iyinoluwa Aboyeji, founding partner of Future Africa, said, “Over the last 12 years, Future Africa has provided early-stage funding to over 100 companies, including a third of the continent’s unicorns. Those early bets have taught us one thing: the future cannot be sustainably built on one layer of the capital stack. Equity must work with debt and long-term securities to provide builders with the capital they need to build the future. This is why we are so excited about the SME Credit Backstop Fund, and how it will enable more Nigerian businesses to access financing for the productive assets they need to create jobs.”
The fund will operate in four steps. Startup partners, like venture funds and studios, will recommend businesses ready to borrow. The fund will then evaluate these businesses using AI for eligibility and risk standards. If approved, the fund helps cover some losses. Financial partners, like Sterling, will take their own look at the borrowers, approve loans, and manage payments and collections.
Businesses can initially receive loans of $250,000 in local currency, with the possibility of longer-term financing based on their cash flows. Once funding is secure, loans may be available up to $1 million.
The funding will come from philanthropic organisations, impact investors, and development finance institutions to support a reserve for guarantees.
The initiative will operate through Riverwell Platform Holding Limited, a UK-based platform that provides support for small and medium-sized enterprises (SMEs), and Riverwell Platform Services Nigeria, which will manage partner coordination, business assessments, data collection, and portfolio monitoring. A separate reserve company will manage the capital that backs the guarantees.
Ukachukwu will also be a director on the Riverwell platform, advising on financing structures and monitoring credit risk.
