The Development Bank of Nigeria (DBN) has set up a Credit Guarantee Subsidiary in order to push more lending to the Micro, Small and Medium Enterprises (MSMEs) sub-sector which now battles survival on the back of coronavirus pandemic.
Impact Credit Guarantee Company Limited (ICGL) was created with the aim of de-risking the MSME sector by sharing risks with the Participating Financial Institutions (PFIs) to give them some comfort to lend to this critical sector of the economy.
Already, the DBN – Nigeria’s wholesale development finance institution – has disbursed over N100Billion to over 100,000 MSMEs cumulatively resulting in an additional job creation of 3,192 jobs in the financial year ended December 2019, Managing Director, Tony Okpanachi said.
In an address at the DBN’s first virtual 3rd Annual General Meeting which held in Abuja, Okpanachi said the bank has also delivered capacity building programs for MSMEs across the six geopolitical zones of the Federation.
Giving a scorecard on the bank’s activities and contribution to the Nigerian economy, he said the bank working through its PFIs has facilitated increase in MSME revenue, as well as assets.
He stated that DBN has focused on engendering gender equality in its loan distribution and empowered youths with 52% of the total loan disbursed to these segments in 2019.
“Through our 27 Participating Financial Institutions, over N100BN was disbursed last year, impacting cumulatively over 100,000 MSMEs. So far, 3,192 jobs have been created leading to an increase of 10% in MSMEs revenue and 6.8% increase in value of their land assets.
“Also, 52% of loans disbursed in 2019 were to youths and women owned businesses. This is in our bid to promote economic empowerment and gender equality,” he said.
DBN was established by the Federal Government of Nigeria in collaboration with global development partners, including the World Bank, African Development Bank (AfDB), Kfw of Germany, French Agency for Development (AFD) and European Investment Bank (EIB) to address the major financing
The bank carries out this function by providing financial institutions, predominantly Deposit-Money and Microfinance Banks with on-lending facilities designed to meet the needs of this segment.
Although Okpanachi did not disclose lending targets with the new credit guarantee scheme, he assured shareholders that the bank is on the right trajectory with a focus on driving sustainable economic growth.
He informed that the Bank is currently expanding its distribution network to include other non-banking financial institutions and working on some concessions to PFIs as well as de-risking of SME lending through the subsidiary, ICGL to increase participation.
He said the strategy will also cover delivery of technical assistance to PFIs and capacity building programs for MSMEs all geared towards encouraging uptake of the DBN funds by PFIs for on lending.
In his remark, Chairman of the Bank, Shehu Yahaya corroborated the MD’s assertions and commended the Federal Government for its commitment and efforts as well as the selfless health workers for their dedication towards tackling the deadly COVID 19 pandemic.
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