4th September, 2021
The Development Bank of Nigeria (DBN) has disclosed that it disbursed N400 billion to Micro, Small and Medium Scale Enterprises (MSMEs) in the last four years.
Managing Director, DBN, Tony Okpanachi disclosed this at the bank’s second edition of its Annual Lecture Series held last Tuesday.
In his opening remarks at the session themed: “Resilient Innovation: MSMEs Adaptability in Uncertain Times”, Okpanachi stated that the mandate of the bank underscores its commitment to the cause of championing conversation on how MSMEs can prosper despite the odds at this peculiar time.
He disclosed that since it commenced operations four years ago, the bank had contributed meaningfully to growth of SMEs in the country through loan facilities and capacity building.
“Since commencing operations in 2017, we have disbursed over N400b in loans to over 150,000 MSMEs, 27% are women and 28% youth owned, creating over 130,000 jobs. In the year 2020 alone, the N190b was disbursed through 19 Participating Financial Institutions (PFIs) out of which N9.8b wase to 6,935 first time borrowers, N5.7b to 9,066 youths and N11.8b to 25,171 women owned businesses.
“Cumulatively, 83% reported an increase in their sales after obtaining the loan while 48% were able to increase their staff strength after receiving the facility. In addition, 125 MSMEs were also trained as part of our capacity building initiative through the DBN Entrepreneurship Training programme which was held in Abuja and Lagos. Participants where lectured by experts on development of business plans, basic accounting and management, digital marketing strategies, basic promotional tools, and assessing business opportunities,” he said.
DBN Chairman, Shehu Yahaya Chairman, in his remarks noted that the whole focus of the lecture is to combine efforts with other stakeholders to develop ideas, policies, programmes and projects to precipitate changes in the MSMEs sector and collaborate to implement them in the coming years.
He stressed that major changes are occurring at the global level and Nigeria must position itself to take advantage.
“All certainties are being pushed aside and new realities are emerging at a faster rate than it ever occurred in the history of human race. PWC projected that by 2050, the world economy can more than double in size far outpacing population growth due to continued technology driven productivity improvements.
“The USA could become 3rd in global economy rankings, the UK could be down to 10th place, France out of the top 10 and Italy missing out of the top 20, overtaken by fast growing economies like Turkey, Mexico and Vietnam. Nigeria and Africa in general must position itself to take maximum advantage of this hiatus, we must not miss out,” he said.
He added that despite the intervention efforts of the government there remains a huge financing gap of over N600b according to the PWC report.
He said the key is to help MSMEs overcome their challenges and transform them into a major fulcrum of the Nigeria economy so that they are at the centre of technological innovation, transformation, local value addition, non-oil export drive, linkage to larger enterprise and a veritable engine for job generation.
Prof. Benedict Oramah, President AFREXIM Bank, represented by Denys Denya (Executive Vice President – Finance, Administration and Banking Services), commended DBN for the creative steps being taken by the Bank to develop the Micro Small and Medium Scale Enterprise.
“MSMEs remain the mainstay of the Nigerian economy and are the pillars on which a diversified economy can be built. Being the foremost promoter of MSMEs, DBN’s role has become paramount as Nigeria prepares to trade under the African Continental Free Trade Agreement and maximise its benefits. DBN’s strategic importance also stems from the fact that no meaningful post covid-19 economic recovery can occur without the sustained growth of MSMEs,” he stated.
The AFREXIM boss stated that there is opportunity for collaboration between DBN, AFREXIM Bank and other development partners in harnessing the talents of the youth, and in building a virile and dynamic MSMEs sector. If properly harnessed, the initiatives supported by AFREXIM Bank and DBN could be a launchpad for a thriving sector.
The panelists in their session submitted that the influence of technology on businesses will continue to grow and MSMEs should begin to see technology as a growth enabler for their businesses.
The panelist comprised of Habiba Ali, Managing Director/CEO SOSAI Renewable Energies Company; Dr. Ola Brown, Entrepreneur and Founder, Flying Doctors Healthcare Investment Group; Iyinoluwa Aboyeji, Serial Entrepreneur and Co-Founder of Flutterwave; and Dr. Amy Jadesimi, Advisory Board Member UN Development Programme’s Africa Human Development Report.
The National Bureau of Statistics released a report showing GDP increased by 5% in Q2 2021. Speaking on if the MSMEs have felt the rebound and growth reported by the recent NBSS report, Dr. Ola Brown said “from extrapolation, there is a recovery but how can we make it easier for these very small businesses to maybe employ more people.
“Those of them that want to scale, how can we help them? Those set up just to take care of basic needs, how do we give them stability and help them formalise so they can access credit? As it is, there is still a huge gap and a long way to go for us to push the micro businesses into the SMEs sector.”
Iyinoluwa Aboyeji pointed out that there’s a revolution bubbling under the surface, which is around services that can be delivered over the internet and how remote work is becoming part of our greater economy. “And I think it is important to study the impact and effects of these and develop long term plans to build on what works for our country,” he noted.
Dr. Amy Jadesimi, on her part noted that “going by the World Bank analytics, 80% of the jobs that needed to be created will be made available by small businesses not big businesses. In terms of the GDP growth, I think what people are feeling is inflation, and this is felt across the board. So in these times of Covid and insecurity, GDP numbers aren’t everything.
“The positive I can see in all of these is that the level of innovation and the supporting interest internationally at developing small companies and innovation is high. I think genuinely for the first time, people are coming together trying to see how we can create a bigger middle class.”
DBN is a wholesale bank that was conceived by the Federal Government of Nigeria in collaboration with global development partners to address the major financing challenges facing MSMEs in Nigeria. The bank lends to Participating Financial Institutions (PFIs) – Microfinance banks, Commercial banks, existing retail DFIs and leasing companies who in turn lend to MSMEs.
DBN’s objective is 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.