DBN lends N70bn to 50,000 MSMEs

Uche Usim, Abuja

Development Bank of Nigeria (DBN) on Monday disclosed that it has so far provided credit facilities to the tune of N70 billion to 50,000 Micro Small and Medium Enterprises (MSMEs) in line with its objective of supporting various business concerns.
Since the establishment of the bank in 2014 as a public limited company, the subsequent licensing by Central Bank of Nigeria and commencement of full operation in 2017, the bank took off with $1.3bn made up of equity and development partners’ fund and revealed that majority of the beneficiaries of its credit are women in view of their robust entrepreneurial capacity.

Speaking at the maiden edition of the DBN annual lecture series themed “Surviving to Thriving: MSMEs as the key to unlocking inclusive growth in Africa”, the Chairman, Board of Directors of the Bank, Dr Shehu Yahaya said plans were afoot to swell DBN’s capital base from the current $1.3 billion to something higher so as to accommodate more MSMEs.

“At the moment, the plan is to attract additional equity from impact investors, as well as multilateral development institutions. That is the way we intend to go to expand. Although the government will remain a shareholder, but the relative ownership of the government will be substantially diluted in favour of private and multilateral development institutions”, he said.

Earlier in his remarks, the representative of the Vice President and Permanent Secretary, Ministry of Finance, Dr Mahmoud Isa-Dutse said DBN has recorded tremendous results in addressing some of the challenges facing MSMEs through the provision of wholesale loans  to financial institutions for on-lending to MSMEs.

Also speaking at the event, the Managing Director of DBN, Mr Tony Okpanachi said the mandate of the bank was to alleviate financing constraints faced by MSMEs in Nigeria through the provision of financing and partial credit guarantees to eligible financial intermediaries on a market conforming and fully financially sustainable basis.

“Data released by both SMEDAN and National Bureau of Statistics (NBS) affirm that there are about 41.5million MSMEs in Nigeria and collectively they contribute to well over 50% of Nigeria’s GDP.

However, access to finance is still a concern for this critical segment of the economy.

The latest figure indicates that at the Micro level, about 90.5% do

not have access to credit whilst the figure for SMEs is put at 67.9%. Other pressing areas which rank high

for SMEs are assistance in power and water supply – 83.5% as well as tax rate reduction – 73.1%”, he said.

In his presentation titled “Financing Africa’s Inclusive Economic Transformation, the role of National Development Banks”, the keynote speaker support to SMEs must begin with a good understanding of the country in which they operate.

He added that in the context of weakening growth in the global economy, slowing international trade, weakening multilateral institutions African economies have to change gear

“Four things appear to me to be fundamental; rebuilding economic buffers against external and internal shocks; sustaining economic growth above population increase; going beyond economic growth to economic transformation, moving up the global value chain and creating jobs; addressing issues of inequalities, inclusion and leaving no one behind

“These are issues that are necessary for economic prosperity but also peace and stability of our nations. Solutions will have to be country specific. The toolbox in the world of finance get more specialised to address the finance “missing middle”  he explained.