Urban youth in Lagos, Nigeria are increasingly turning to microfinance institutions (MFIs) for financing their entrepreneurial ventures. However, there is limited empirical research on the economic performance of these institutions. The analysis employs a mixed-methods approach, combining quantitative data from MFI loan portfolios with qualitative interviews to gain deeper insights into institutional practices and client experiences. Urban youth MFIs in Lagos have achieved an average annual growth rate of 15% in loans extended over the past three years, highlighting their effectiveness in supporting young entrepreneurs' financial needs. Despite initial challenges, urban youth MFIs in Lagos are demonstrating significant economic benefits for both clients and institutions. Further research is needed to refine these findings and inform policy recommendations. Policy makers should consider incentivizing urban youth MFIs by providing additional funding or regulatory support, while also encouraging them to adopt more innovative financial products tailored to young entrepreneurs' needs.