Reports have established that the Central Bank of Nigeria has granted an Approval‐in‐Principle for the floating of the Development Bank of Nigeria (DBN) following a successful fund raising of over $1 billion from the World Bank, African Development Bank (AfDB), KfW of Germany and AfB of France.

The emerging bank will serve as a useful vehicle to drive the recently disbursed N220 billion ($1.38 billion) fund for MSMEs all over the country. At the disbursement forum, President Jonathan had flagged the necessity for a Wholesale Development Finance Institution (DFI) that can facilitate long term loans for MSMEs.

“All over the developed world, the contribution of MSMEs to GDP is on the average of about 47 percent. This shows clearly how important the MSMEs are to us. With about 17.3 million SMEs in Nigeria, there is need for more concrete and concerted efforts to expand the activities of MSMEs in our country. MSMEs shave been recognized globally as the engine of growth in any development oriented economy,” he said.

Nigerians will expect the bank to aggressively support and spur the growth of MSMEs while also increasing financial inclusion across board. A useful region to target with these services will be the northern region which has historically shown the lowest levels of financial inclusion in the country. More highly performing MSMEs in Nigeria will mean enhanced productivity, increased capacity building and value chain promotion.

In a related development, the Nigerian Federal Government has also made moves to partially privatize the Bank of Industry (BoI) and Bank of Agriculture (BoA); the whole idea being to restructure the Development Finance Institutions in the country and better position them to serve the growing needs of Nigerians.

Source: Ventures Africa