Uche Usim, Abuja
In line with its set up mandate, the Development Bank of Nigeria on (DBN) on Wednesday, said it has signed on about 35,000 Micro Small and Medium Enterprises (MSMEs) (also known as end borrowers) in 2018 being its first full operational year.
This figure translates to a 75% increase over its announced target projection of 20,000 MSMEs for the year.
The bank also underscored the significant progress which the institution which was established to provide structured and sustainable financing to small businesses has made since it commenced formal lending activities in October 2017.
In July, DBN’s Managing Director, Tony Okpanachi had predicted a spike in the number of MSMEs signing up towards year-end: “DBN has granted loans to about 10,000 small businesses this year, or half its target. We are going to see more up-tick from this July as the newly signed-up lenders bring their pipeline to us.”
Still, the current increase is still a vast improvement over projections.
The achievement is coming on the heels of another important milestone attained by DBN: its recent induction into SME Finance Forum, a global membership network that brings together financial institutions, technology companies, and development finance institutions to share knowledge, spur innovation, and promote the growth of SMEs.
The SME Finance Forum was established by the G20 Global Partnership for Financial Inclusion (GPFI) in 2012 as a knowledge center for data, research and best practice in promoting SME finance.
The focus of the network of 140 members is to collaborate on catalyzing and expanding access to finance for MSMEs.
It is expected that the opportunities for networking and strategic partnerships afforded by the Forum will boost the bank’s capacity to deliver on its mandate in terms of knowledge, capacity and best practice.
The milestone reinforces other positives that have been notched up by the institution.
One of these is the planned establishment of a subsidiary which will be responsible for providing partial credit guarantees to lenders. The unit will have start with $35million in start-up funding will become a reality in 2019.
The plan is to provide 50 percent guarantees for all credit disbursed through DBN and the funding will be increased as the unit takes on more portfolios.
Another significant development is that in line with its strategy of funding SMEs through appropriate institutions with verified capacity, DBN has reached agreement with19 participating finance institutions (PFIs).
DBN’s strong focus on development objectives such as job creation and poverty alleviation is supported by a strong, confidence boosting world class governance structure which has clear reporting standards.
It also has the distinction of having the most robust international partnerships in the sector in Nigeria which includes investors like the World Bank, African Development Bank and the European investment Bank.