By BARNABAS EKE, Lagos
The Development Bank of Nigeria (DBN) is poised to address one of the critical challenges of the Micro, Small and Medium Enterprises (MSMEs) through the provision of long-term finance to participating Primary Financial Institutions (PFIs) to enable them to avail longer-tenor financing to end-borrowers under the MSMEs category.
Dr. Anthony Okpanachi, the Managing Director/Chief Executive Officer of DBN announced this in Lagos, on Thursday, while addressing Journalists on the activities of the development Bank in the past five years.
Also on the cards, according to Dr. Okpanachi, are: measures for granting additional moratorium to eligible MSMEs by partnering PFIs, the introduction of interest-draw back scheme which will serve as incentives to customers who faithfully repay their loan obligations in line with lending conditions, introduction of Non-Interest Banking products to serve special interests, the Gender Finance Framework as well as financing of businesses that facilitate ‘green transitions’ through renewable energy, sustainable agriculture and waste management.
DBN is licensed as a wholesale bank which only provides funding to partnering PFIs for on-lending to eligible MSMEs. According to Dr. Okpanachi, over sixty PFIs have been onboarded as partners in the past five years.
According to the five-year performance document presented by DBN, a sectoral breakdown of funding to 313,000 MSMEs indicates that out of the N631billion that was advanced to PFIs for on- lending, as at December 2022,Trade & Commerce got N230 billion. Manufacturing- N69billion. Food & Agriculture- N27billion. Hospitality and Tourism- N13billion. Education- N12billion. Health-N11.5billion and Technology- N11billion.
Dr. Okpanachi noted that the dominance of the trade and commerce sector is a reflection of the nation’s current socio-economic reality and observed that plans were underway to see the scaling up of lending to other sectors through the eligible MSMEs.
While recognising the enormity of funds required to achieve relative lending parity among all sectors, the MD/CEO hinted that the bank will, as part of its long term funding strategy, raise additional funds through the issuance of bonds. The bond issuance plan, according to the MD has reached advanced stage and, would soonest be rolled out.
He, however, noted that the bank was on a sound financial footing and that the proceeds of the bond would blend with existing capital to position the bank for the expected surge on demand for funding by both the existing customers of the participating PFIs and new clients.
