Ndubuisi Francis in Abuja
As the Development Bank of Nigeria (DBN) begins the final processes of take-off, the Minister of Finance, Mrs. Kemi Adeosun, has disclosed that her ministry is in discussions with the Central Bank of Nigeria (CBN) on the need to use the emerging bank to convey any of the CBN’s subsequent Small, Medium Enterpries’ (SMEs) interventions.
Adeosun also stated that the DBN is being positioned to galvanise the SMEs sector for the overall development of the nation’s economy.
According to her, the present administration is aware of the role of SMEs in national economy, hence the resolve to position the DBN as a catalyst for the development of the SMEs.
The minister, who spoke during a Board/Management/Development partners’ retreat of the DBN in Abuja, last Monday, also assured the board that the federal government is ready to provide support for the new development financial institution.
The DBN had convened its development partners and incoming management team and Board of Directors for an inaugural strategy retreat, in order to ready itself for immediate operation upon the issuance of its licence by the CBN.
A statement issued by the minister’s media aide, Mr. Festus Akanbi, said she decried the present situation where SMEs account for 45 per cent of Nigeria’s Gross Domestic Product (GDP) but just 10 per cent of bank credit.
She pointed out that currently, Nigeria’s financing of MSMEs lagged significantly behind other countries, including Brazil (63 per cent), Ghana (36 per cent), China (30 per cent), Kenya (24 per cent), and South Africa (21 per cent).
However, the minister who disclosed that the operating licence for DBN was expected imminently also believed that through the activities of the DBN, some of the problems currently discouraging the growth of the SMEs sector would be effectively tackled.
She stated that DBN would lend to microfinance banks, which will in turn develop specific products for specific markets at a lower interest rate than currently available to SMEs.
The DBN is a wholesale financial institution, which aims to increase access to finance for Micro, Small and Medium Enterprises (MSMEs) through eligible financial intermediaries (“participating financial institutions”).
It will have access to US$1.3 billon (N396.5 billion), which will be provided by the World Bank, KfW (German Development Bank), the African Development Bank (AfDB) and the Agence Française de Development (French Development Agency).
