By Abubakar Yunusa
Recognizing the pivotal role of MSMEs in the economy, Development Bank of Nigeria (DBN) enlightened MSMEs on ways to thrive amidst socio-economic and political headwinds.
The managing director/CEO of DBN, Dr. Tony Okpanachi stated at the fifth DBN Annual Lecture 2024 with the theme, ‘“Empowering Nigerian MSMEs In A Challenging Global Landscape’.
According to Okpanachi, Micro, Small, and Medium Enterprises (MSMEs), often overlooked but undeniably, are the backbone of our economic landscape, driving job creation, innovation, and the overall prosperity of the nation.
“Development Bank of Nigeria’s objective is to alleviate financing constraints faced by MSMEs and small Corporations in Nigeria through the provision of financing and partial credit guarantees to eligible financial intermediaries on a market-conforming and fully financially sustainable basis. We have dedicated ourselves to achieving this objective through several initiatives, one of which is the DBN Annual Lecture, which kicked off in 2019.”
He explained that “as Nigeria’s primary development finance institution, we recognize that the current global economic climate presents a formidable challenge to MSMEs, particularly in Nigeria where rising production costs, inflation, unstable exchange rates, and disruptions in the global supply chain affect output.”
Okpanachi noted that the annual lecture presents plausible alternatives on how MSMEs can thrive amidst these socio-economic and political headwinds, which is why we go the extra mile in bringing together the best brains to share their perspectives.”
He added that the government has also taken significant steps to address these challenges through various initiatives to create a more enabling environment for MSMEs, saying that “there is still more can be done. We all must support the government’s efforts by working together creatively and implement innovative strategies to empower MSMEs and unlock their full potential.
“By establishing loan guarantee schemes, allocating funds for innovative startups, providing targeted tax breaks, and investing in essential infrastructure, we can create a conducive environment for MSMEs to grow and prosper.”
He pointed out that “over the past year, the partnership with our PFIs has continued to evolve, resulting in significant achievements in supporting the growth and development of MSMEs across the country. Together, we have provided critical funding, technical assistance, and capacity-building programs to empower MSMEs to realize their full potential.”
Okpanachi further said “since we commenced operations, we have cumulatively disbursed N786 billion in loans to 494,819 Micro, Small and Medium Enterprises (MSMEs) across the country, thereby resulting in the creation of 1.2 million jobs.”
He noted that “as a result of our solid commitment to our mandate of driving sustainable growth, we have also aligned and supported the federal government’s priority sectors in our disbursement; for instance, N74 billion of our loans were allocated to the manufacturing sector, benefitting 3,696 end-borrowers; N38 billion to agriculture, reaching 8,163 end-borrowers, just to mention a few. These strategic investments underscore our drive to grow sectors vital to the nation’s economic development.”
Also speaking at the event, the Managing Director and Chief Executive Officer of Fidelity Bank,Dr. Nneka Onyeali-Ikpe, urged the Nigerian government to establish a dedicated Micro, Small, and Medium Enterprises (MSME) Bank to ensure affordable financing for small businesses.
She made the call during her keynote address at the Development Bank of Nigeria (DBN) Lecture Series 2024, held in Abuja.
Speaking on the theme “Empowering Nigerian MSMEs in a Challenging Global Landscape,” Dr. Onyeali-Ikpe emphasized the importance of institutions specifically designed to support the financial needs of MSMEs.
She also highlighted the burden of double taxation faced by small business owners, noting that multiple tax authorities often target MSMEs, forcing many to close their operations.
“The government has a critical role to play,” she stated. “We need to intentionally establish an MSME Bank to ensure that small businesses have access to funds at a reasonable rate.
“While this may challenge the business models of commercial banks, it is a necessary step for sustainable growth.”
Dr. Onyeali-Ikpe further called for the expansion of developmental financial institutions, such as the Bank of Industry (BOI) and the Bank of Agriculture, suggesting the creation of sector-specific banks for mining, exports, and other key industries.
She stressed the need for tax breaks and financial relief for startups, aligning her remarks with ongoing government discussions on MSME palliatives.
“The growth of MSMEs is essential for Nigeria’s economy. By providing the right support, we can unlock their potential and boost our GDP,” Dr. Onyeali-Ikpe said.
