ARM Investment Managers has unveiled a ₦200 billion private debt programme aimed at widening access to long-term financing for small and medium-sized enterprises (SMEs) in Nigeria, as part of efforts to address the persistent funding gap in the sector.
The Chief Executive Officer of the ARM Private Debt Fund, Deji Opeola, disclosed this on Monday at the launch of the SME financing initiative in Lagos. He announced the debut of Series I of the ARM Private Debt Fund, a closed-ended private credit vehicle structured to provide long-term, flexible capital to scalable SMEs, while delivering stable, risk-adjusted returns to institutional and qualified investors.
According to Opeola, the Series I offer is seeking an initial raise of ₦25 billion, forming part of a broader ₦200 billion shelf programme registered under relevant regulatory frameworks.
“Private credit plays a critical role in modern financial systems,” he said. “The fund will deploy capital primarily through senior secured term loans, revolving credit facilities and selective subordinated debt to high-quality SMEs across key sectors of the Nigerian and sub-Saharan African economy.”
Priority sectors, he noted, include manufacturing, trade and distribution, agribusiness value chains excluding primary agriculture, services, logistics and technology-enabled businesses.
Opeola explained that the initiative comes against the backdrop of limited access to long-term credit for SMEs, which account for nearly half of Nigeria’s Gross Domestic Product and more than 80 per cent of employment, but continue to face financing constraints due to regulatory pressures, rising interest rates and balance sheet limitations within the banking system.
On the scale of the challenge, he said Africa faces an SME credit gap of over $40 billion, compared with about $3.3 billion in private credit assets under management, while Nigeria alone has a financing gap estimated at $32.2 billion.
“Although banks provide about 90 per cent of credit on the continent, they remain largely risk-averse to SMEs,” Opeola added.
He said the fund has been deliberately structured to bridge this gap through strong governance, rigorous credit underwriting and active portfolio management, with at least 80 per cent of assets invested in senior secured, asset-backed and covenant-protected facilities.
The fund is targeted at institutional investors, development finance institutions, family offices and high-net-worth individuals seeking private credit exposure as a portfolio diversifier. It is expected to deliver returns of about 300 basis points above the yield on the Federal Government of Nigeria’s 10-year bond, subject to market conditions.
Speaking on the broader economic implications, Group Chief Executive Officer of ARM Holdings, Wale Odutola, said Nigeria’s growth ambitions require substantial investment in alternative asset classes that are not adequately represented in the traditional stock and bond markets.
“These include infrastructure, solid minerals, agriculture, private debt, trade and the creative sector,” he said, noting that significant capital is required in these areas for growth to be inclusive and sustainable.
Odutola said the private debt fund, which has been in development for over 12 months, is designed to fill the financing gap left by traditional banks and enable private sector companies to access capital needed to expand operations, improve service delivery, grow market share and extend their reach within and beyond Nigeria.
