The Federal Government has pledged its full support to the Development Bank of Nigeria, towards expanding credit to Medium, Small and Medium Enterprises, aimed at making them major drivers of the nation’s economy.
The Minister of Finance, Budget and National planning, Zainab Ahmed, who represented the Vice President of Nigeria, Prof.Yemi Osinbajo, stated this Thursday in Abuja during the 3rd Annual Lecture of the bank, with the themed “MSMEs: Thriving in the face of Domestic and Global Disruptions”.
Zainab called on DBN to expand its funding window to provide affordable financing to a wide range of MSMEs, following several vulnerabilities, posing great threats to the existence of small businesses.
She said, “With the disruptive effects of the Russia-Ukraine war on the economy and its consequent impact on the cost of doing business, difficulties facing MSMEs have increased significantly. It is important that the DBN step up to the plate and expand its funding windows to provide affordable financing to a wider cross-section of MSMEs.
“The Federal Ministry of Finance, Budget and National Planning and all its agencies stand ready to utilise the fiscal policy tools at our disposal to support the DBN and other public and private sector actors working towards the common goal of ensuring MSMEs can become key drivers of economic growth and create sustainable and livelihood-enhancing jobs for segments of the working population prone to vulnerability,” the Minister said.
While expressing worry at the contribution of MSMEs to export, Ahmed said the government is working to eliminate the constraints working against trade amomg nations.
“The relatively low contribution of MSMEs to exports is concerning given their significant contribution to nominal GDP and for this reason, urgent steps are being taken to alleviate the binding constraints limiting MSME participation in cross-border trade,” Ahmed said.
The Finance Minister said the demand for financing among formal and informal MSMEs shows the relevance of DBN in a bid to making positive contributions to the nation’s GDP.
According to Ahmed, “This underscores the important role played by the DBN in facilitating access to finance and with a total loan disbursement of N482 billion to 208,000 MSMEs in 2021, of which 27 percent are youth-owned while 66 percent are owned by women, the DBN continues to be a major driver of MSME growth in Nigeria”.
In his welcome address, the Managing Director/Chief Executive of DBN, Okpanachi said the Annual Lecture has become necessary because it serve as a tool of fashioning ways MSMEs can prosper in the midst of harsh economic realities.
He said, “in today´s increasingly turbulent world, MSMEs find themselves frequently affected by unpredictable external factors such as natural disasters, climate change issues, disease outbreaks, technological and cyber changes, trade disputes, policies, etc, which have had an immense impact on local businesses. It is, therefore, imperative for us as a Bank to champion the conversation on how MSMEs can prosper despite the odds, by exposing ways through which MSMEs can adapt in these times. Hence, the DBN Annual Lecture Series Initiative.”
Justifying the concentration paid to MSMEs, Okpanachi said the contribution of MSMEs to job creation across the globe in general and Nigeria’s GDP was too great to be ignored.
“This is because Micro, Small, and Medium Scale Enterprises are responsible for more than two-thirds of all jobs worldwide. The International Labour Organization (ILO) data shows that micro- and small enterprises, together, account for a staggering 70% of employment worldwide.
The Micro, Small, and Medium Enterprises, MSMEs contributed 48% percent to Nigeria’s Gross Domestic Product, GDP, according to a 2022 survey conducted by the Small and Medium Enterprises Development Agency, SMEDAN in collaboration with the National Bureau of Statistics, NBS,” he said.
The Managing Director further reiterated the commitment of the bank to work with its Participating Financial Institutions (PFIs) to eliminate the financing constraints faced by MSMEs sector of the economy.