We gave out N70bn credit to MSMEs in 2 years – DBN Chairman

Motolani Oseni

The Development Bank of Nigeria (DBN) Monday disclosed that it has given out N70 billion as loans to over 50,000 Micro, Small and Medium Enterprises (MSMEs) within two years.

The Chairman of the bank, Dr. Shehu Yahaya said this at the maiden series of the bank with the theme: Surviving To Thriving: “MSMEs as the key to unlocking inclusive growth in Africa”, held in Abuja.

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.

He noted that it was important that the government seeks ways to boost job creation through formal enterprises.

Yahaya said that DBN change the narrative by providing finance and partial credit guarantees to eligible financial intermediaries based on market conformity as well as full financially sustainability.

Earlier in his address the Managing Director of DBN, Mr Tony Okpanachi, said that as the bedrock of economic growth and development MSMEs can play a critical role in accelerating economic transformation and industrialization.

According to Okpanachi, the lecture series is one of the ways to further strengthen the economy by ensuring that MSMEs are adequately empowered to continually contribute effectively to the Gross Domestic Product (GDP) of the nation.

Citing data from both SMEDAN and National Bureau of Statistics (NBS) which put the number of MSMEs in Nigeria at 41.5million, the Managing Director said that 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 the figure for SMEs is put at 67.9 per cent.

Other pressing areas which rank high for SMEs are assistance in power and water supply – 83.5 per cent as well as tax rate reduction- 73.1 per cent.”

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 market conforming 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.

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 the 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.