ARM launches N200bn Financing for SMEs

ARM Investment Managers has launched a N200 billion Private Debt Fund targeted at providing long term financial aid for Nigeria’s small and medium-sized enterprises at rates below the current market benchmark of about 27%.

This was announced by the Chief Executive Officer of the ARM Private Debt Fund, Deji Opeola, while speaking during the launch of the SME financing initiatives in Lagos.  The Initiative has an initial Series 1 size of N25 billion and an overall programme target of N200 billion.

He said the ARM Private Debt Fund is aimed at channeling non-bank financing to scalable small and medium-sized enterprises that are typically locked out of affordable credit by commercial banks.

The Fund Manager said, “Private credit plays a vital role in modern financial systems. The Series I offering is targeting an initial raise of N25bn, forming part of a broader N200bn shelf programme registered under applicable regulatory frameworks.

“The fund will deploy capital mainly 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.”

Opeola added that the launch comes as a result of growing concerns over limited access to long-term credit for SMEs, “which account for nearly half of Nigeria’s Gross Domestic Product and over 80 per cent of employment.

He noted that the fund was deliberately structured to bridge this financing gap while maintaining strong investment discipline.

“This fund has been deliberately structured to combine strong governance, rigorous credit underwriting, and active portfolio management. Our objective is to protect investor capital while supporting the growth of viable SMEs that create jobs, deepen local value chains, and contribute meaningfully to economic development,” he said.

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“However, regulatory constraints, rising interest rates, and balance-sheet pressures have curtailed the ability of traditional banks to meet the sector’s financing needs.”

Talking about the credit gap, Opeola explained that, “Africa faces over $40bn SME credit gap versus just $3.3bn in Private Credit AUM, a structured brake on growth and value creation. Nigeria’s SME financing gap is $32.2bn. The banks provide approximately 90 per cent of all credit on the continent yet remain risk-averse towards SMEs.”

Also present at the launch, the Chief Executive Officer of ARM Holding, Wale Odutola, While speaking on the impact of the programme, said that for the economy to grow at the required pace and for that growth to become inclusive and reach the lowest levels of society, there must be substantial investment over the next few years.

He said, “By ‘alternative,’ I mean asset classes that are not well represented in the organised markets, such as stock or bond markets. These asset classes include infrastructure, solid minerals, agriculture, private debt, trade, and the creative sector.

“We strongly believe that these segments require significant capital for Nigeria to grow in the direction and at the pace we desire, and for that growth to be inclusive.

“It is in line with this thinking that ARM is launching this private debt fund. This initiative has been in the works for over 12 months, primarily because we believe that private debt to the organised private sector is largely lacking. While banks exist, they are restricted in their ability to provide sufficient capital and credit to this segment of the market.

“We believe that by organising ourselves in a way that allows private companies like ours to launch a fund capable of providing the required capital, private sector companies can tap into funding that helps them drive growth, expand operations, improve the quality of services they provide, increase output, expand market share, and extend coverage across Nigeria. With this capital, they can also expand beyond Nigeria’s borders.”