The Federal Government is to shed its equity in Development Bank of Nigeria (DBN) with a view to further capitalising the financial institution to deliver on its mandate.
Set up two years ago, the bank is obligated to finance the activities of micro, small and medium enterprises (MSMEs) to catalyse the nation’s industrialization drive.
The government’s decision comes as DBN disclosed yesterday that it had given N70 billion loans to over 50,000 businesses. Chairman of the financial institution, Dr. Shehu Yahaya, noted that the diversification of government’s holding in the organisation would allow for fresh investors to come aboard.
Currently, the bank’s ownership consists of the Federal Government; World Bank; African Development Bank (AfDB); KfW Development Bank; French Agency for Development (AFD) and European Investment Bank (EIB) with a capital base of about $1.3 billion.
Yahaya, who announced the Nigerian government’s plan at the inaugural DBN lecture series themed “Surviving to thriving: MSMEs as the key to unlocking inclusive growth in Africa”, explained that the facilities were disbursed in the last 18 months. He said the bank would attract more equity funding from the AfDB, EIB and development partners for better capitalisation to position it effectively for MSMEs’ funding.
In his remarks, the managing director, Tony Okpanachi, regretted that despite the fact that MSMEs remained the bedrock of economic development, the sector was however under-funded, thus had been able to achieve its job-creation potential.
According to him, about 90.5 per cent of enterprises at the micro level do not have access to credit while 67.9 per cent of small and medium enterprises lacked access to finance.
In addition, he said 83.5 per cent of SMEs have challenges with power and water supply just as 73.1 per cent of them also contend with high taxes.The Permanent Secretary, Ministry of Finance, Mahmoud Isa-Dutse, pointed out that the President Muhammadu Buhari administration since assuming office in 2015 recognised the need to prioritise MSMEs, as they account for almost 60 per cent of the nation’s gross domestic product (GDP).
He said government had demonstrated interest to develop this sector by either enacting laws or setting up agencies and institutions to address the challenges confronting players in this critical industry. Majority of the speakers at the event called on the government to address the constraints affecting performances of micro, small and medium businesses nationwide.
The occasion was also graced by former AfDB president, Dr. Donald Kaberuka; Vice President, Country Operations, Islamic Development Bank, Dr. Mansur Muhtar; erstwhile Director-General of the West African Institute for Financial and Economic Management (WAIFEM), Prof Akpan Ekpo, among other major stakeholders.