Tayo Oyedele: Why Nigerian Businesses Need More Than Loans to Scale

Finance Minister Taiwo Oyedele says growing companies need patient capital, experienced investors and institutional support. Nigeria’s MSME financing gap shows why access to money is only part of the challenge.

Nigerian businesses seeking to expand need more than conventional bank loans. They also need patient capital, stronger management capabilities, access to markets and institutional support that can help them turn promising products into sustainable businesses.

That was the message from Taiwo Oyedele, Nigeria’s Minister of Finance and Coordinating Minister of the Economy, at the fourth edition of the Nigeria Sovereign Investment Authority (NSIA) Prize for Innovation in Abuja.

Represented by his Special Adviser on Finance and Investment, Marie Ukpere, Oyedele said access to credit alone could not resolve the structural challenges preventing many promising businesses from growing.

His remarks came as seven startups received awards at the innovation competition, which supports businesses developing solutions in areas including healthcare, manufacturing and food systems.

The message matters beyond the event. For businesses trying to expand in Nigeria, the challenge is not simply finding money. It is securing the right kind of capital, at the right time, alongside the skills and commercial opportunities needed to use it effectively.

Nigeria’s MSME financing problem goes beyond loans

Micro, small and medium-sized enterprises are central to Nigeria’s private sector, but many struggle to obtain formal financing on suitable terms.

The World Bank said in December 2025 that fewer than one in 20 Nigerian MSMEs had access to bank credit. It also identified high borrowing costs, short loan tenors and collateral requirements as barriers that prevent otherwise viable businesses from securing funding.

In response, the World Bank approved a $500 million financing package for the Fostering Inclusive Finance for MSMEs in Nigeria (FINCLUDE) programme. The initiative is designed to expand access to finance through the Development Bank of Nigeria and credit guarantees, with the aim of encouraging lenders to serve businesses that might otherwise be considered too risky.

The programme targets financing for 250,000 MSMEs, including at least 150,000 women-led businesses and 100,000 agribusinesses. These are targets, not evidence that the businesses have already received financing.

The initiative illustrates the scale of the financing challenge, but it also raises a broader question: will more available credit translate into businesses that become more productive, employ more people and grow into larger companies?

Why loans alone may not be enough

A loan can help a business purchase inventory, pay suppliers or acquire equipment. But debt creates repayment obligations, even when sales are slower than expected or expansion takes longer than planned.

A young company developing a new product, entering a new market or building a production facility may need a longer investment horizon than a conventional short-term loan can provide.

Equity investment and venture capital offer an alternative. Investors provide money in exchange for an ownership stake and the prospect of future returns, rather than relying solely on scheduled loan repayments. Depending on the arrangement, they may also offer strategic guidance, connections and support in building a management team.

Such funding is not automatically preferable. Founders may have to give up part of their ownership, and investors may expect influence over important business decisions. The appropriate financing structure depends on the company’s stage, cash flow, risks and growth plans.

This is why Oyedele’s emphasis on patient capital and experienced investment partners is important. Businesses need financing that fits the economics of what they are trying to build, rather than money alone.

The NSIA Prize for Innovation backs early-stage companies

The NSIA Prize for Innovation is designed to identify and support early-stage Nigerian businesses with the potential to develop scalable solutions to economic and social challenges.

The authority’s official programme announcement describes a package that combines prize funding with entrepreneurial training, mentorship, strategic networks and opportunities to seek further growth capital.

For the fourth edition, NSIA identified manufacturing, climate and food security, and healthcare as priority areas. These sectors can require more than a digital product or an initial injection of working capital: companies may need specialised equipment, regulatory compliance, distribution infrastructure and long periods of investment before achieving scale.

According to the event report, 12 finalists emerged from more than 6,000 applications after five stages of screening and business development activities. The finalists were also expected to participate in a six-week learning programme at Lagos Business School, with additional business-development and financing opportunities available through programme partners.

Come Again Foods emerged as the overall winner, with Protein Kapital and InstantRad placing second and third, respectively, according to the event coverage.

The programme’s value will ultimately depend on what happens after the awards. Funding and training can provide a starting point, but businesses must still win customers, control costs, build reliable operations and demonstrate that their products can compete.

Capital readiness matters as much as capital access

The event also highlighted the role of business preparation in attracting investment.

Affiong Williams, founder and chief executive of ReelFruit and lead judge of the competition, said her company had raised more than $7 million over 14 years. She pointed to preparation, credibility and resilience as important factors in attracting investment.

Dave DeLucia, founder and director of Cascador, similarly argued that preparing businesses to attract capital was as important as providing the funding itself.

For founders, capital readiness means being able to explain how a business makes money, demonstrate demand for its products, produce reliable financial information and show how additional funding will support growth.

Investors also need evidence that a business can manage the risks that accompany expansion. Weak financial controls, unclear ownership arrangements, poor record-keeping and an untested route to market can make it difficult for a promising company to attract funding even when the underlying idea has potential.

Support programmes can help businesses address these gaps, but progress requires sustained engagement after the initial training or investment.

Market access and institutional support are also critical

Financing cannot compensate indefinitely for weak demand. A business that secures funding but struggles to reach customers may accumulate costs without generating enough revenue to sustain its operations.

Companies seeking to scale may need distribution partners, access to larger buyers, industry expertise, reliable suppliers and support navigating regulatory requirements. Businesses outside major commercial centres may face additional challenges in accessing investor networks and specialised business services.

This is particularly relevant to companies in healthcare, manufacturing and food systems, where scaling can involve complex supply chains, product standards, logistics and capital-intensive infrastructure.

The combination of finance and business-development support is therefore important. Funding can help a company expand its capacity, but customers and effective operations are what allow that capacity to translate into sustained revenue.

Measuring success beyond the prize ceremony

The NSIA Prize for Innovation offers one route for supporting emerging companies, while programmes such as FINCLUDE aim to improve access to finance across a much wider group of MSMEs.

Their impact should be assessed against outcomes rather than commitments alone. Relevant measures include the number of businesses that secure follow-on investment, revenue and productivity growth, jobs sustained or created, access to new markets and survival rates over several years.

NSIA has said that the progress of startup investments should be judged over time rather than expecting immediate results. That is a useful principle for early-stage businesses, whose commercial development can take years.

However, patient assessment should not mean an absence of accountability. Programme operators and investors need transparent reporting to show whether funding and support are producing durable business outcomes.

For Nigerian entrepreneurs, the broader lesson is that financing is a tool, not a complete growth strategy. The companies most likely to scale are those that combine appropriate capital with customer demand, capable management, sound governance and the ability to execute.

Oyedele’s remarks put that distinction at the centre of the conversation. The next test for Nigeria’s business-support programmes is whether they can help more promising enterprises move beyond survival and become productive, competitive and sustainable companies.