Impact of DBN’s Support for MSME Growth, National Economy

By Adegboyega Bashir

This article offers information that best explains the role and impact of the Development Bank of Nigeria Plc (DBN) in the growth of Nigeria’s Micro, Small and Medium Enterprises (MSME) sector and corrects all erroneous impressions about the bank.

The impact of DBN over the past years of the bank’s establishment is in the public domain, including the bank’s official website and social media platforms.
DBN, as a wholesale development finance institution, has been making strides in fostering MSMEs’ growth in Nigeria. With a clear mandate to provide financial solutions and support economic development, DBN has made significant strides in empowering thousands of entrepreneurs and creating jobs.

Loan Process

Let me break down how the DBN loan process works. DBN doesn’t give loans to businesses directly. This is done through Partner Financial Institutions (PFI). Its direct interface with the MSMEs is capacity building and training, by equipping them with the right skills, knowledge, capacity for business growth and sustainability and how to access the loans. DBN’s capacity programmes are taught modules on Credit Management and Access to Finance, Sustainability for Small Businesses, Accounting and Book-Keeping, and Marketing and Sales Techniques.

The well-equipped entrepreneurs can thereafter approach the Participating Financial Institutions (PFIs) to access funding. The PFIs comprise Depositor Money Banks (DMBs), Microfinance Banks (MFBs) and other financial institutions (OFIs), which are the primary lending institutions that provide loans to businesses.
So, this is the level of relationship and roles that DBN plays between the MSMEs and PFIs. It is also noteworthy to state that the pivotal role played by DBN significantly bridges the funding gap for the MSMES sector because most of them are unable to access credit from conventional banks due to a lack of credit history. DBN not only removes the funding barrier for MSMEs, but it also ensures more favourable terms, including an interest rate better than the usual commercial rate.
Facts, figures and statistics, they say, do not lie. For those who claimed they did not see, hear or know about the achievements of DBN, they can check these out. As of December 31st, 2024, DBN, working in partnership with 79 Particpating Financial Institutions comprising Deposit Money Banks, Micro Finance Banks and Other Financial Institutions, has disbursed over N1trn as credits to 721,819 MSMEs across Nigeria’s six geo-political zones.
The cumulative loan disbursements’ chart shows consistent uptakes – N133bn in credits disbursed to 100,709 MSMEs in 2019; N334bn credits to 134,855 MSMEs in 2020; N482bn to 208,371MSMEs in 2021; N632bn to 313,058 MSMEs in 2022; N788bn to 494,819 MSMEs in 2023; and N1,061bn to 711,819 MSMEs in 2024.
By empowering these businesses, 1.2 million jobs have been created, with the multiplier effects of further empowering and supporting thousands of families and households who benefit through the pipeline of value chains. DBN, in its commitment to fostering gender inclusivity, also supports women and youth who are business owners by prioritising access to credit for 76% women-led MSMEs and 26% youth-led MSMEs.

Impact on MSME

DBN’s impact on MSME growth extends to capacity-building programmes for MSMEs and PFIs. Through the flagship annual DBN Enterprises Training Programme (DBNETP), over 9,500 MSMEs have been trained. The DBN ETP is held in 12 cities across Nigeria’s six geo-political zones, underscoring the national spread of the capacity programme and impact on businesses from all regions of the country.

It should be emphasised again that DBN’s primary role or direct interface with MSMEs is in relation to capacity-building on how to run, manage and scale businesses in a sustainable manner, by preparing entrepreneurs for accessible credits from the PFIs. Those who have attended DBN trainings are awarded certificates of participation. They can then proceed to apply to any PFI for credit, and businesses that meet the criteria for accessing funding from the PFIs get funding.

DBN, as an MSME-focused institution, similarly empowers its strategic partners through training. Over 35 PFIs have benefitted from the DBN’s Community of Practice Programme, thereby strengthening the efficiency of the credit ecosystem, while 79 PFIs comprising DMBs, FBs and OFIs have been onboarded onto the MSMEs financing ecosystem. With the annual flagship DBN Techpreneur Summit, the bank is promoting the growth of MSMEs within Nigeria’s innovation and technology ecosystem.

Collaboration

Through its collaboration with the Federal Ministry of Communications, Innovation and Digital Economy (FMCIDE), DBN is expanding opportunities for fellows of the Three Million Technical Talent (3MTT) programme by offering them digital and business training via DBN’s BizAid platform. Through this support, the participants have access to DBN’s network of financial partners and a chance to compete for a share of the N100 million grant pool for business growth.
Not only does DBN operate with a robust framework built on core values of sustainability, transparency, excellence, diversity, and innovation, but the bank’s operations and loan process involve working with integrity-driven strategic national, regional and global institutions.

DBN’s established partnerships include Agence Française de Développement (AFD), International Finance Corporation (IFC), the World Bank, Africa Development Bank (AfDB), Africa Development Fund (Fund of AfDB), German Development Bank (KFW), The Montreal Group, European Investment Bank, and International Bank for Reconstruction and Development (IBRD),
Other strategic partners are the Association of African Development Finance Institutions (AADFI), Federal Ministry of Finance Incorporated (MOFI), Nigeria Sovereign Investment Authority (NISA), SME Forum, Nigerian Association of Small and Medium Enterprises (NASME), and the Enterprise Development Centre of the Pan African University.
Working with these multi-layered institutions, including the PFIs, ensures that funds are disbursed efficiently and effectively to MSMEs, while DBN’s credit guarantee process further mitigates risks, encouraging PFIs to lend to small businesses.

Accountability

Accountability is pivotal to DBN’s core values. As required by the Banks and Other Financial Institutions Act (BOFIA) 2020, the bank’s audited accounts are published publicly.

It is not only that DBN’s footprints are visible on Nigeria’s MSME financing landscape; its impact has been applauded from far and near. The bank’s shelf of accolades, awards and recognitions, too numerous to list here, provides more than convincing evidence. Just to show a little – DBN is the proud winner of The World Bank’s Best Project in Nigeria award; First Prize Winner, AGFUND’s Prince Talal International Prize for Human Development in line with SDG 8; and Nigeria’s First Accredited Entity to Green Climate Fund.

DBN has also earned high ratings by rating agencies for its stability outlook, including “AAA’’ with Stable Outlook GCR Ratings by Agusto & Co., and “AA in the 2024 AADFIPSGRS Rating by AADFI, respectively. DBN is a recipient of multiple ISO 27001, ISO 20000 and ISO 22301 certifications, as well as SSCI certification.
Of course, it is not yet time for DBN to rest on its oars. There are approximately 39.7 million MSMEs in Nigeria, according to SMEDAN. This means DBN still has much ground to cover. The 721,819 MSMEs impacted across Nigeria’s six geopolitical zones are like a drop in the ocean. But this is also a big opportunity for DBN to reach more MSMEs.

Without any doubt, the impact of DBN on Nigeria’s MSME landscape and the economy is undeniable, with thousands of businesses supported and millions of jobs created. DBN’s commitment to transparency, accountability, and impact is evident in its operations and achievements.

By providing financial solutions, capacity building, and strategic partnerships, DBN is empowering MSMEs and driving economic growth in Nigeria. As Nigeria continues to navigate economic challenges, institutions like DBN play a vital role in shaping the country’s economic future.

Adegboyega Bashir, a public relations specialist, writes from Abeokuta.