The Managing Director of Development Bank of Nigeria, Tony Okpanachi, has said that the bank has allocated over 11,000 loans valued at N91bn to Micro Small Medium Enterprises (MSMEs) through the Impact Credit Guarantee initiative.
Okpanachi disclosed this during an event which was attended by representatives of all the Development Finance Institutions (DFIs) in Nigeria.
The event was focused on, “Innovative financing for sustainable growth and development.”
The DBN boss said through the ICG, “Loan guarantee (of) over 11,000 (has been disbursed) to MSMEs which is worth over N91bn, so they have been in operation for over two years.”
He said first time borrowers received over 19 per cent of the guarantees provided, adding “most financial institutions don’t operate” using such a model.
The guarantee is denominated in Naira. But other credit guarantees are denominated in foreign currencies, he added.
The DBN boss explained that the bank has provided a five years credit guarantee for MSMEs with a platform for risk sharing.
Okpanachi said the role of MSME to any economy can’t be overly emphasized.
He said in “April 2022, ICG onboarded about 12 financial institutions that they can lend through, or guarantee through them.
“ICG is available for everyone to upscale and its activities have created over 29,000 jobs.”
Professor Joseph Nnanna, a Chief Economist of DBN who spoke at the event lamented that Nigeria suffers largely from structural unemployment.
According to him, it has mismatched the health sector, education sector, adding that “the labor market is the biggest reason for the mismatch.”
He said, “As unemployment level continues to rise, market failure exists, DFIs individually have absolved the gaps, basically demonstrating profitability, demonstrating non-financial indicators such as job creations and many more.
“I sincerely believe that the government is a collaborative effort, we need to collaborate more to achieve inclusive goals and exponential impact.
“The children remain the future, and as we charge the way forward, it is important for us to essentially think about the future.
“The health care sector, education sector are still wanting, but ICT is growing against the backdoor of Covid-19 pandemic, we witnessed a lot of hope, association, and pressure offering different innovative ways to generate new ideas for business growth.”