Raising Capital for Small Businesses in Lagos State, Nigeria: Financing Barriers, Funding Pathways and Policy Responses
Abstract
This paper examines the options and constraints confronting small businesses seeking startup or expansion capital in Lagos State, Nigeria. It uses a qualitative and descriptive synthesis of the NBS/SMEDAN 2021 MSME enumeration, PwC’s 2024 national survey of 557 MSME operators, EFInA’s 2023 financial inclusion evidence, and World Bank financing announcements through October 2026. Lagos recorded 91,097 formal enterprises in the NBS/SMEDAN enumeration (7.3% of the national formal total). In PwC’s national results, 27% of respondents identified interest rates as a borrowing barrier, 26% excessive procedures and 16% insufficient collateral; 40% cited working capital as the purpose of borrowing. Recent World Bank support includes a $500 million FINCLUDE initiative approved in December 2025, with ambitious prospective mobilization and outreach targets. The analysis argues that capital mobilization involves choosing instruments suitable for financing needs, improving verifiable financial information and addressing credit-supply market failures. National findings are not presented as Lagos-specific estimates; announced future program targets are not treated as observed outcomes.
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