Sterling Bank and Cascador Launch $200M SME Credit Backstop
Sterling Bank and Cascador have introduced a $200 million SME Credit Backstop Fund, a standalone initiative to broaden growth financing options for Nigerian small and medium-sized enterprises prepared to take on debt. This fund offers participating lenders a structured credit-risk guarantee, potentially enabling up to $1 billion in total outstanding loans across the ecosystem.
The initiative follows Cascador’s release of its white paper, The Multiplier Model, which highlights the constraints limiting African businesses’ ability to scale and the need for capital matched to each company’s maturity stage. Across Sub-Saharan Africa, businesses rely more heavily on equity than the global average, reflecting limited debt availability. Only 22% of regional businesses hold a bank loan or line of credit, compared with a global average of 36%.
A Gap in Debt Access
The SME Credit Backstop Fund targets this gap by creating a structured pathway for larger, longer-term loans. It addresses barriers preventing businesses ready to borrow from accessing debt. Trish Thomas, CEO of Cascador, emphasized the disconnect between Nigeria’s entrepreneurial talent and its capital constraints: “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.”
The fund combines Cascador’s expertise in identifying scalable businesses with Sterling Bank’s lending infrastructure and credit-market knowledge. Obinna Ukachukwu, Group Executive at Sterling Bank, noted the partnership’s focus on mitigating lending risks across the entire financing journey. “This combines a stronger borrower pipeline with structured assessment and ongoing monitoring, giving us greater confidence to provide larger, longer-term loans,” he said.
The model operates through four stages of the financing chain. SME ecosystem partners identify and nominate businesses meeting debt-readiness criteria. The fund then applies AI-powered underwriting, due diligence, and risk standards, providing a loss backstop for approved borrowers. Finance partners independently assess, approve, and disburse loans, retaining responsibility for servicing and collections. Initially, SMEs can access local currency loans up to $250,000, with the fund aiming to unlock financing of up to $1,000,000 once fully funded.
“Over the last 12 years, Future Africa has provided early-stage funding to over 100 companies, including a third of the continent’s unicorns. Those early bets have taught us one thing: the future cannot be sustainably built on one layer of the capital stack. Equity must work with debt and long-term securities to provide builders with the capital they need to build the future. This is why we are so excited about the SME Credit Backstop Fund, and how it will enable more Nigerian businesses to access financing for the productive assets they need to create jobs,” said Iyinoluwa Aboyeji, Founding Partner of Future Africa.
The Catalytic Fund Model
Modeled upon the Catalytic Fund structure piloted by Cascador (as nominator and guarantor) and Sterling (as lender), the new fund will be independently managed to ensure sustainability and discipline while allowing participation from a range of ecosystem partners. The model integrates risk-sharing between finance partners, the fund, and backstop capital providers.
Scaling Proven Ventures
Since 2019, Cascador has supported 80 ventures that raised over $150 million in capital. These alumni reached more than 1.7 million customers and nearly 4,000 employees by 2025, demonstrating the potential of aligned capital strategies. The fund aims to extend this trajectory by enabling proven businesses to access growth financing.
