The Minister of Finance, Kemi Adeosun, has stated that the Development Bank of Nigeria, DBN, is being positioned to galvanise the Small and Medium Scale Enterprises, 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 wide range of SMEs is a reflection of our economic diversity, she said.
The minister, who spoke during a Board/Management/Development partners’ retreat of the DBN in Abuja, on 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 license by the Central Bank of Nigeria, CBN.
She decried the present situation where SMEs account for 45 per cent of the 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 is 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.
She stated that the finance ministry is in discussion with the Central Bank of Nigeria on the need to use the Development Bank as a vehicle for any of its subsequent SMEs intervention.
The Development Bank of Nigeria, 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).
The DBN will have access to $1.3 billion (N396.5 billion), which will be provided by the World Bank (WB), KfW (German Development Bank), the African Development Bank (AfDB) and the Agence Française de Development (French Development Agency).