Nigeria launched a $672 million fund on Tuesday to support tech and creative sectors for young investors who struggle to raise capital in Africa’s largest economy.
The fund – targeting 15 to 35-year-olds – comes at a time when there are concerns locally about the failure of U.S. startup-focused lender SVB Financial Group, which has supported startups in Nigeria.
So far only Chipper Cash, a cross border payments startup, has said it had $1 million in SVB. Some of the biggest startups, including e-commerce firm Jumia and Africa-focused fintech firm Flutterwave, told Reuters they had no exposure to the bank.
Vice President Yemi Osinbajo launched the $672 million fund under the Digital and Creative Enterprises Programme (DCEP) in the federal capital Abuja, the presidency said in a statement.
African Development Bank will put in $170 million, $116 million will come from Agence Francaise de Developpement and another $70 million from Islamic Development Bank, the presidency said.
The government through Bank of Industry Nigeria will release $45 million while the private sector pledged $271 million.
“DCEP is a government initiative to promote innovation and entrepreneurship in the digital tech and creative industries and especially targeted at job creation,” Osinbajo was quoted as saying at the launch of the fund.
Nigeria has the largest number of startups in Africa – mostly in tech and fintech – which have pulled funding from overseas banks and venture capital firms.
But most startups still struggle to attract funding because banks demand that they provide collateral, which they do not have.