The World Bank said in a report on Friday that 321,867 Micro, Medium, and Small Businesses have benefited from wholesale funding totaling $1.4 billion over the course of six years.
The Punch revealed that the funds disbursed through the Development Bank of Nigeria were to provide long-term loans and risk-sharing facilities to small enterprises, of which 66% were owned by women and 12% were first-time borrowers, according to the report titled “Tackling access to finance for micro, small, and medium enterprises.”
According to the bank, one of the biggest and most persistent challenges that micro, small, and medium-sized businesses in Nigeria face is access to financing.
It said, “One significant and persistent challenge faced by micro, small, and medium-sized businesses in Nigeria is access to financing. In 2014, only 6.7 per cent of enterprises reported having a loan or active line of credit.
“MSME loans accounted for only 2% of the assets in the banking sector, and they constituted an average of 5% of all commercial bank lending by volume.
The private credit-to-GDP ratio is still low today and is mostly held by big, “blue-chip” corporations and the oil and gas industry. Despite being the backbone of the Nigerian economy, MSMEs’ growth was severely hampered by their limited access to financing.
Due to this difficulty, the ministry of finance requested assistance from the World Bank in order to launch the $500 million loan support for the Nigeria Development Finance Projects.
“Among its 28 Partner financial institutions, the DBN has established a reputation for being impartial, extremely responsive, and creative,” the statement reads.
Important project accomplishments include on-lending to 321,867 MSMEs, of which 66% are owned by women and 12% are first-time borrowers, and providing wholesale funding to PFIs totaling the naira equivalent of $1.4 billion.
