Cascador and Sterling Bank have unveiled a $200 million SME Credit Backstop Fund to help Nigerian small and medium-sized enterprises (SMEs) access larger, longer-term loans.
The fund will provide participating lenders with a defined level of protection against losses and is designed to support up to $1 billion in outstanding credit. The announcement follows Cascador’s white paper, The Multiplier Model, which argues that African businesses struggle to scale partly because the capital available to them does not match their stage of growth.
According to the paper, only 22% of businesses in Sub-Saharan Africa hold a bank loan or line of credit, against a global average of 36%, and firms in the region rely more heavily on equity to finance investment than their global peers.
“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,” said Trish Thomas, CEO of Cascador.
“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,” She added.
How Cascador and Sterling Bank’s $200m fund will work
Cascador, which identifies, supports and invests in businesses with the potential to scale, will bring its ecosystem relationships, while Sterling Bank contributes lending infrastructure and credit-market expertise.
The fund will also bring together ecosystem partners, lenders and backstop capital providers, such as philanthropic funders, impact investors and development finance institutions, in a single risk-sharing arrangement.
The process has four steps. Ecosystem partners nominate businesses that meet the fund’s debt-readiness standards. The fund then screens them against its own eligibility, guarantee and portfolio-risk criteria, using AI-powered underwriting and due diligence, and provides a defined backstop for approved borrowers. Lenders assess each borrower independently, approve and disburse the loans, and remain responsible for servicing, monitoring and collections.
SMEs can initially access local-currency loans equivalent to $250,000, with the fund aiming to unlock loans of up to $1 million once it is fully funded. The model is intended to give businesses longer-tenor financing with a lighter collateral and guarantee burden, subject to lender approval.
“At Sterling, the strength of this partnership lies in how it addresses lending risk across the entire financing journey,” said Obinna Ukachukwu, Group Executive at Sterling Bank. He said the structure “combines a stronger borrower pipeline with structured assessment and ongoing monitoring, giving us greater confidence to provide larger, longer-term loans.”
The fund will operate through Riverwell Platform Holding Limited, a UK-owned, technology-enabled SME infrastructure platform, and its Nigerian arm, Riverwell Platform Services Nigeria, while the reserve capital will be held separately. The Nigerian company will handle partner coordination, business-readiness checks, assessment, data collection, portfolio monitoring and reporting. Ukachukwu will also serve as a director on the Riverwell platform.
The fund is modelled on the Catalytic Fund that Cascador, as nominator and guarantor, and Sterling, as lender, have piloted over the past two years. It will be independently managed.
Iyinoluwa Aboyeji, founding partner at Future Africa, said in a statement: “Equity must work with debt and long-term securities to provide builders with the capital they need to build the future.”
Cascador says it has supported 80 ventures since 2019, which have together raised more than $150 million. In 2025 alone, its alumni served more than 1.7 million customers and directly employed almost 4,000 people. Sterling Bank focuses its lending on health, education, agriculture, renewable energy and transportation.
Read also: Cascador selects 10 Nigerian startups for 2026 ScaleUp Programme
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