MSMEs Get Over N1trn Loan as DBN Targets N1.3trn Capital
The Development Bank of Nigeria (DBN) announces disbursement of over N1 trillion to support micro, small, and medium enterprises (MSMEs).
The bank is also exploring sources to raise its debt and equity capital financing to N1.3 trillion in the next five years.
The managing director of the bank, Tony Okpanachi, stated that its support has benefited more than 69,000 MSMEs operating in economically disadvantaged states such as Borno, Yobe, Katsina, Zamfara and Adamawa.
DBN was conceived by the Federal Government of Nigeria (FGN) in collaboration with global development partners to address the major financing challenges facing Micro, Small and Medium Scale Enterprises (MSMEs) in the country.
The objective is to alleviate financing challenges facing the MSMEs and boost job creation initiatives.
According to the MD, the bank is fulfilling its mandate as 711,819 MSME beneficiaries reached.
In addition, 1.2 million jobs have been created while 20 participating financial institutions (PFIs) have been supported through the DBN Technical Assistance Programme.
He disclosed that 74 per cent of the beneficiaries are women while 25% are youths. The bank also disclosed that 40 per cent of loans disbursed were in support of women-led MSMEs, adding that there is an outstanding N75-N100 billion of green financing.
On the N1.3 trillion new debt and equity capital, the managing director stated that the plan is to expand its sources of funds to boost its capacity to support the MSMEs which is its mandate.
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He said the bank is in talks with a number of development partners that are eager to collaborate with it.
“Strategically, we have to first expand our sources of funding. Two, deepen [our relationship] with the existing ones. How can we get more? Three, how can we use existing ones to catalyse additional ones.
“So, a lot of other partners want to come into Nigeria, work in Nigeria, and because of the reputation of DBN, want to use DBN.
“They want to work with DBN. We need to crowd it in for us to be able to make this impact we’re talking about. So, that is what I was saying, both in terms of debt and equity.
“We have had some debt sheets in terms of lending; some debt sheets, which we will not go into full detail. We have some debt sheets, as well, from the time we knew we had some funding coming in, some from the AfDB, some from KFW, and then we had another conversation with other partners.
“In addition to that, we are trying to raise funds locally. We have a bond programme that will go out on the first phase. So, if the macro becomes favourable, we will do an additional phase.”
The MD further disclosed that the bank has unveiled a five-year strategy to scale up its activities by reaching over two million MSMEs and growing guarantees issued to N500 billion.
He pointed out that the bank is targeting sectors with huge potential for job creation like agriculture, manufacturing and renewable energy.
“So we are consciously looking at what we find in those sectors that are more labour-intensive.
“Even when we are doing green energy, we are looking at manufacturing, where they are recruiting, where they have more people. So, we are deliberate in terms of working with sectors where we will make money. So, it is a strategic move we are making,” he said.
