The International Finance Corporation is considering an investment of up to $8 million in Aruwa Capital Fund II, a private equity vehicle targeting small and medium enterprises in Nigeria and Ghana.

The proposed commitment, disclosed by the World Bank Group's private sector arm, would be in equity form and capped at 20 percent of total fund commitments. The project is expected to go before IFC's board on March 11, 2026.

Aruwa Capital Fund II is targeting $50 million, with a hard cap of $60 million. The fund will primarily invest in Nigeria, allocating up to 20 percent of capital to Ghana.

Managed by Aruwa Capital Management, the vehicle plans initial investments of $1 million to $3 million in growth-stage SMEs. It focuses on companies promoting women's inclusion across consumer goods, clean energy, financial services and healthcare.

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IFC said the project may benefit from $3 million under the IDA21 Concessional Capital Window in the form of subordinated co-investment.

Key Takeaways

Private equity funding for early-stage and growth SMEs remains limited in West Africa, where access to long-term capital is constrained and banks often require high collateral. By anchoring the fund, IFC could help crowd in institutional and private investors. The use of concessional capital through IDA21 reflects a blended finance approach aimed at reducing risk and mobilizing private capital into underserved segments. Subordinated co-investment can improve the fund's risk profile and support investments in smaller or higher-impact businesses. Nigeria represents the bulk of the opportunity given its market size, while Ghana offers regional diversification. A gender-lens strategy aligns with global investor mandates focused on inclusion and impact. If fully subscribed at $60 million, the fund could deploy capital into a pipeline of growth-stage firms that face a financing gap between early venture funding and larger private equity rounds.