ARM Investment Managers has unveiled a N200bn private debt programme aimed at expanding access to long-term financing for small and medium-sized enterprises in Nigeria.
The Chief Executive Officer of the ARM Private Debt Fund, Deji Opeola, disclosed this on Monday during the launch of the SME financing initiatives in Lagos.
He announced the launch of Series I of the ARM Private Debt Fund, a closed-ended private credit vehicle designed to provide structured, long-term capital to scalable SMEs while offering stable, risk-adjusted returns to institutional and qualified investors.
Opeola 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.”
Priority sectors include manufacturing, trade and distribution, agribusiness value chains (excluding primary agriculture), services, logistics, and technology-enabled businesses.
The launch, Opeola added, comes amid 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.
“However, regulatory constraints, rising interest rates, and balance-sheet pressures have curtailed the ability of traditional banks to meet the sector’s financing needs.”
On 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.”
Opeola 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.
According to ARM, the Private Debt Fund is targeted at institutional investors, development finance institutions, family offices, and high-net-worth individuals seeking exposure to private credit as a portfolio diversifier.
“The fund is expected to deliver returns of about 300 basis points above the yield on the Federal Government of Nigeria’s 10-year bond, subject to market conditions,” Opeola said.
ARM noted that at least 80 per cent of the portfolio will be invested in senior secured, asset-backed, and covenant-protected facilities.
“We are building a platform designed for institutional standards. Our focus on senior secured lending and disciplined risk management reflects our commitment to long-term value creation,” Opeola added.
Speaking on the economic impact of the SME financing initiatives, the Group Chief Executive Officer of ARM Holdings, Wale Odutola, 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.”
