The clever part of this $200 million fund is that none of it is meant to be lent out. Cascador, the Lagos growth-stage founder platform, and Sterling Bank have launched an SME Credit Backstop that sits behind Sterling's loans and absorbs part of the loss if a borrower defaults. Their claim is that $200 million of cover can support up to $1 billion of outstanding credit, a five-to-one multiplier.
In naira, at Tuesday's official rate of about ₦1,333 to the dollar, that is roughly ₦267 billion of backstop for about ₦1.33 trillion of potential lending.
Why banks need the cushion
The bottleneck is trust: banks rarely lend to young firms with thin collateral. World Bank survey data cited with the launch puts the share of Nigerian businesses holding a bank loan or credit line at about one in five, below the Sub-Saharan average of 22% and well short of 36% globally.
The backstop tries to change that maths. Venture firms and startup studios nominate companies, the fund screens them with AI-assisted underwriting, and Sterling still does its own credit checks, disbursement and collection. Borrowers can start with local-currency loans equivalent to $250,000, about ₦333 million, with the ceiling rising to $1 million once the fund is fully capitalised. Obinna Ukachukwu, a group executive at Sterling, says the cover should let the bank offer larger, longer-term loans.
From pilot to platform
This is a scaled-up version of a catalytic fund the two partners have run for about two years. When it was announced in May 2025 it was a $2 million pot reserved for Cascador alumni, with Cascador taking first loss. At its pitch day in June this year, Cascador deployed more than $5 million to seven founders.
The jump from a $2 million fund to a $200 million backstop is a hundredfold, and the partners have not said how much of the $200 million is already committed. Impact investors, philanthropies and development finance institutions are the expected sources. That is a big if, and the $1 billion figure only works once the money is in.
The pipeline is the other test. Cascador says it has backed 80 ventures since 2019. Even if each borrowed the full $1 million, that is $80 million, under a tenth of the stated capacity, so the fund will need many more nominating partners than its own alumni.
Cascador and Sterling have built a sensible structure for one of Nigeria's oldest business problems, and the next thing to watch is how much backstop capital is actually committed and how quickly the first larger loans go out.
Figures are as reported at the time of writing. STATART news is written by Frank Brother (Markets), Christina Amgbari (Insights) and Ebipadei Joseph (Lifestyle), and checked before publication.