The Federal Government has commended the board and management of Development Bank of Nigeria (DBN) for its sustained funding interventions in the real sector of the economy over the years and charged the development finance institution to focus more on Small and Medium Enterprises (SMEs) in view of the sub-sector’s criticality to the nation’s Gross Domestic Product (GDP) growth.
The Vice President, Prof. Yemi Osinbanjo, who gave the charge on Thursday in his speech at the bank’s Annual Lecture Series which held in Abuja, noted that the call was informed by the fact that the development finance institution was created in collaboration with key development partners to address the financing challenges facing Micro, Small and Medium Scale Enterprises (MSMEs).
Represented at the event by the Minister of Finance, Budget and Planning, Mrs. Zainab Ahmed, the Vice President noted that over the years, the DBN had, while providing wholesale funding and risk-sharing facilities to Participating Financial Institutions (PFIs) for on-lending to MSMEs, distinguished itself as a key contributor to unlocking the capacity of MSMEs to catalyse economic growth and job creation in the Nigerian economy.
Citing latest international and domestic statistical data on MSMEs’ contributions to national economic growth, especially Nigeria, to justify his position on why MSMEs should be prioritized in funding and other policy measure supports, Osinbajo, maintained that 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 continued to be a major driver of MSME growth in Nigeria.
Elaborating further on why the DBN and other institutions should increase their support for small enterprises in the country, the Vice President 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”, Osinbajo added.
In his concluding remarks, the Vice President hinted that apart from various measures introduced by the government to support MSMEs’ growth in the country, including fiscal reliefs and incentives provided for in the Finance Act 2021, further policy actions were being considered by the government in support of MSMEs as work progresses on the preparation of the Finance Act 2022 for the 2023 fiscal year.
