The International Trade Centre (ITC) and the United Nations Capital Development Fund (UNCDF) have signed a new agreement to expand access to finance for small and medium-sized enterprises (SMEs) in Nigeria and other developing markets.

The agreement, signed on the sidelines of the ongoing 81st session of the United Nations General Assembly (UNGA81), provides a framework for both organisations to jointly develop solutions that bring trade-related technical assistance and financing together.

The partnership combines ITC’s trade and SME expertise with UNCDF’s catalytic and concessional financing capabilities to help address one of the persistent barriers facing small businesses seeking to trade and scale across Africa.

The framework lays the foundation for the establishment of a dedicated facility that will support SMEs across Africa through tailored financing solutions, technical assistance, and policy and market expertise.

The facility will provide a vehicle through which public and development finance can be deployed catalytically to address investment barriers, mitigate investment risks and mobilise additional private capital into sectors with strong export and growth potential.

UNCDF’s Executive Secretary, Pradeep Kurukulasuriya, said the challenge was not simply the availability of capital, but creating the conditions for that capital to flow where it was needed most.

“Too often, viable small businesses are perceived as too risky or too costly to finance. Working with ITC allows us to tackle both sides of that equation, strengthening the capacity of SMEs to compete and access markets, while using catalytic finance to address the risks that prevent capital from reaching them,” he said.

The new framework responds to priorities identified by governments at ITC’s inaugural Global SME Ministerial Meeting in Johannesburg last year, during which representatives from 60 countries identified improving SME access to finance among their shared priorities.

It also reflects the broader shift in development cooperation towards approaches that use concessional finance strategically and catalytically to mobilise investment and private capital.

ITC’s Executive Director, Pamela Coke-Hamilton, said access to finance remained a major challenge facing small businesses.