In its over two years of existence, the Development Bank of Nigeria (DBN) has given out N70 billion as loans which has impacted over 50,000 Micro, Small and Medium Enterprises (MSMEs), the bank’s chairman, Dr. Shehu Yahaya has said.
Dr. Yahaya who said this at the maiden DBNLecture series on Monday in Abuja added that it was important that the government seek ways to boost job creation through formal enterprises.
Noting that poverty and inequality had deepened in the country due to population and economic growth which has led to increase in unemployment, Dr. Yahaya said the bank is seeking to change the narrative by providing finance and partial credit guarantees to eligible financial intermediaries on a market conforming as well as fully financially sustainable basis.
Yahaya said that bank will continue to work in line with its mandate which is to alleviate financing constraints being faced by the Micro, Small and Medium Enterprises (MSMEs) in Nigeria.
In his welcome address DBN’s Managing Director, Mr. Tony Okpanachi, noted that as bedrock of economic growth and development MSMEs can play a critical role in accelerating economic transformation and industrialization.
Quoting data from both SMEDAN and National Bureau of Statistics (NBC) which put the number of MSMEs in Nigeria at 41.5million, he said they collectively contribute over 50 per cent 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 thefigure 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%.”
Underscoring the importance of the event, the Okpanachi said MSMEs are the bedrock of Nigeria’s Industrialization and inclusive economic development noting that as the largest employers in many low-income countries including Nigeria, their viability and growth has been restricted by lack of access to long-term debt capital.
“Our mandate at the Development Bank of Nigeria is to alleviate financing constraints faced by the Micro, Small and Medium Enterprises (MSMEs) in Nigeria through the provision of financing and partial credit guarantees to eligible financial intermediaries on a marketconforming and fully financially sustainable basis and this lecture series is our way of providing a platform for a robust exchange of ideas to tackle the challenges and take advantage of opportunities that exist in the MSME segment of the economy.
“We believe that at the end of today’s interactions we would have a broadened understanding of these challenges and critically examine and act towards practical steps to resolve some of the obstacles that constrain growth within the segment,” he added.
The inaugural Development Bank of Nigeria Plc Annual Lecture Series, is meant to deliberate and forge a sustainable way forward for Micro, Small and Medium Enterprises (MSMEs), not just in Nigeria, but across Africa.
In his keynote address, former President of the African Development Bank (AfDB) Dr. Donald Kaberuka, asserted that unfavorable government policies and bureaucracies rather than lack of access to finance was the major drawback to growth of MSMEs.
“Think of a small car repairer in Kaduna, or a small kiosk owner in Soweto. If electricity is unreliable his small margins are gone even if they had access to finance.
“Think of red tape, and multiple level taxation or inability to access government procurement or not being paid on time.
“But there is also inexperienced management and capacity, and limited access to accounting services,’’ he said.
Kaberuka called on the Nigerian government to intensify efforts to achieve more than six per cent growth if Nigerians were to feel impact of the growing economy.
The maiden edition of the DBN Annual Lecture Series has as its theme: “Surviving To Thriving: MSMEs as the key to unlocking inclusive growth in Africa.”
