Cascador, a Nigeria-focused platform supporting growth-stage founders, and Sterling Bank, a Nigerian commercial bank, have launched a US$200 million credit backstop fund aimed at expanding access to debt financing for Nigerian startups and small businesses, with the facility targeting up to US$1 billion in supported lending.
The SME Credit Backstop Fund will provide partial credit guarantees to lenders, covering an agreed portion of potential losses if borrowers default. The structure is designed to encourage banks to extend credit to businesses that may struggle to meet conventional lending requirements, particularly those relating to collateral.
Rather than lending directly to businesses, the fund will reduce participating lenders' exposure to credit risk. Sterling Bank will retain responsibility for conducting its own credit assessments, making lending decisions, disbursing approved facilities, collecting repayments and pursuing borrowers who default.
Fund targets loans of up to $1m
Under the arrangement, eligible businesses will initially be able to access local-currency loans worth up to US$250,000, with plans to increase the limit to US$1 million.
The fund will consider businesses nominated by venture capital firms and startup studios that already support them. An artificial intelligence-powered underwriting process will assess whether nominated businesses are ready to take on debt financing.
By combining recommendations from investors familiar with the businesses with a formal underwriting process, the initiative seeks to help lenders identify potential borrowers while maintaining their own credit approval procedures.
The partners expect to raise the US$200 million in backstop capital from philanthropic funders, impact investors and development finance institutions. The US$1 billion figure represents the lending capacity the fund aims to support, rather than the amount it will directly disburse to businesses.
Expanding an existing financing arrangement
The launch builds on an earlier collaboration between Cascador and Sterling Bank established in 2025 through a US$2 million catalytic fund that provided debt financing to Cascador alumni.
Under that arrangement, eligible businesses accessed loans at interest rates of approximately 20%, with significantly lower collateral requirements. Cascador nominated and guaranteed borrowers, while Sterling Bank provided the financing.
At its Pitch Day in June 2026, the programme provided more than US$5 million in financing, including a ₦2.5 billion debt facility to agritech startup Agriarche.
The new SME Credit Backstop Fund expands the model beyond Cascador's alumni by accepting nominations from other venture capital firms and startup studios, potentially widening the pool of businesses eligible for credit support.
Riverwell platform to oversee operations
The fund will operate through Riverwell Platform Holding Limited, a UK-owned company, and Riverwell Platform Services Nigeria, its Nigerian operating company.
The Nigerian entity will coordinate partners, assess borrowers, collect data and monitor loan portfolios, while a separate reserve company will hold the backstop capital.
Obinna Ukachukwu, a group executive at Sterling Bank, will serve as a director on the Riverwell platform.
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