DBN secures €25m for MSMEs, assures transparency

Add as a preferred source

German government-owned Development Bank, KFW has injected €25 million into the Nigerian economy for the growth and development of micro, small and medium enterprises (MSMEs) and the renewable energy sector through the Development Bank of Nigeria (DBN) Plc.

Commenting on the development, at DBN office in Lagos, Managing Director/CEO of DBN, Mr. Tony Okpanachi, said that KFW has always been supportive of Nigeria’s economy in various sectors, this time, they’re keen to see that MSMEs and the energy sector in the country bounce back.

His words: “Today we just signed an agreement for the credit line of €25m provided by KFW to Development Bank of Nigeria to finance renewable energy and Micro, Small and Medium Enterprises (MSMEs). We are wholesale DFI poised to provide access to credit to Micro, Small and Medium Enterprises through wholesale lending to financial institutions and other Microfinance banks.

“We provide them with wholesale funds to onward lending to micro small and medium enterprises. As a core part of our mandate, we provide of course we partial credit guarantee, all our efforts are geared towards development and sustainable growth of our economy”

He added that DBN already has 65 financial institutions in line with green and renewable energy and businesses in Micro, small and medium enterprises, that relate directly with the small businesses to support them.

According to him, the bank would monitor and evaluate the whole process, noting that “By the time we provide them with the Line and they come draw on the line, we come to know which customers they are lending to directly, we sit down with customers and discuss and find out how they utilize the funds and how it has impacted in their businesses. We are not just disbursing funds to our financing partners and relax, we shall monitor them throughout the process, the ultimate end is impact to them and the economy”
The banker who expressed optimism added that there would be regular reporting feedback from the partners (financial institutions) when they draw the line. More so, the DBN shall do its independent Monitoring and Evaluation to get feedback directly from the end borrowers to know how they’re managing the funds and challenges, then compare the feedback from the financial institutions and those from the end borrowers and see if they align before taking decision and even make better plan.

For cost of obtaining the credit (in percentages), he said the banks would decide because they bear the credit risks, however, he auspiciously noted that the criteria and conditions to access credit would be seamless.

“This is an interesting time for MSMEs because they are the bedrock of every economy. With this credit they would expand businesses, create jobs and boost our GDP. We are not unmindful of the harsh economic environment and that is why in DBN we create several access to funds in different areas, so we push for moratorium, for longer tenures for MSMEs to ensure that their businesses are able to mature and stay stable before they’re able to pay,” he avowed.

On his part, the Senior Portfolio Manager (Equity Investment/Funds- Sub Sahara Africa & Latin America) for KFW, Mr. Pierre Annutsch, said the financial institution would continue to offer support in diverse ways to the Nigerian economy.

“We just signed a credit line with DBN of €25m to support MSMEs and the energy efficiency/ renewable energy, and we believe it would go a long way to help the economy. We are not just giving the credit but we shall follow up in the process,” he professed.

READ ALSO FROM NIGERIAN TRIBUNE