DBN Disbursement to MSMEs Hits N191.7bn

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Managing Director of DBN, Mr. Tony Okpanachi

By James Emejo

The Development Bank of Nigeria (DBN) Plc has stated that the total loans disbursed to small businesses had increased by 89 per cent to N191.7 billion in 2020 compared to N101.5 billion in 2019.

This was contained in its 2020 financial report, which was made available to journalists yesterday.

The bank Managing Director/Chief Executive, Mr. Tony Okpanachi, said the growth was in line with its core mandate of facilitating sustainable socio-economic development by improving financial access for MSMEs in the country.

According to him, the bank worked through its Participating Financial Institutions (PFIs) to facilitate increased lending to MSMEs, thereby accelerating economic growth.

He expressed optimism in its capacity to weather the effects of the global pandemic and other challenges.

The MD said: “We appreciate the full cooperation of our board, management, staff, and other stakeholders as we were able to operate within strict health and safety guidelines, while increasing our reach to our target market.

“By onboarding more Participating Financial Institutions, we were able to deepen financial inclusion for more Micro, Small, and Medium Scale Enterprises (MSMEs) whose businesses were adversely affected by the pandemic, thereby injecting a new lease of life and providing the right environment for their sustained growth.

“We will continue to focus on our core mandate of driving developmental impact.”

The bank recorded a growth of 4 per cent in total assets from N474.7 billion in 2019 to N493.5 billion in 2020, while outstanding loans increased by 110 per cent from N101.9 billion in 2019 to close at N214.0 billion in 2020.

The mix of earnings assets tilted further in favour of loans rather than investments, as the bank continues to ramp up lending to small businesses in Nigeria, which are the engine of growth of the economy.

Income from loans also grew significantly by 60 per cent year-on-year from N6.6 billion in 2019 to N10.5 billion in 2020; return on assets and return on equity stood at 4 per cent and 11 per cent respectively, for end of the year, December 31, 2020.

Several cost containment strategies were deployed by the bank resulting in a 12 per cent decrease in operating expense year-on-year.

The bank’s earnings remained strong at N34.6billionn in spite of the harsh global realities brought about by the COVID-19 pandemic as well as other macroeconomic challenges encountered during the year.

DBN is a wholesale development finance institution established by the federal government in collaboration with global development partners (World Bank, AfDB, KfW, AFD, and EIB) to address the major financing challenges facing MSMEs in Nigeria.

The bank carries out the function by providing financial institutions, predominantly deposit money and microfinance banks, with on-lending facilities designed to meet the needs of this segment.