…Partners AfDB to grow MSMEs funds

From Uche Usim and Okwe Obi, Abuja

Eleven Participating Financial Institutions, (PFI), failed to scale through Development Bank of Nigeria’s (DBN) eligibility criteria test for participation in its onlending scheme due to commence soon.

This was as it announced plans to partner with African Development Bank (AfDB) to swell its financial base so as to provide more loans for Micro, Medium and Small Enterprises (MSMEs). 

The Chairman of DBN, Dr. Shehu Yahaya, who disclosed the PFIs loan eligibility failure in Abuja yesterday, when Pierre Guislain, the Vice President, Private Sector Infrastructure and Industrialisation, at the AfDB paid him a courtesy call said that 36 PFIs took part in the exercise. 

According to him, out of the 36 PFIs that applied only 21 met DBN’s criteria.

He said: “the on-boarding process for banks that met our eligibility criteria have commenced; as two commercial banks have already signed on our Master Lending Agreement and due diligence on these banks will commence shortly, while we are working towards signing on two more commercial banks this months.

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“Already, over N5 billion has been disbursed to some Micro Financial Institutions for on-lending to over 20,000 MSMEs across the nation. In a nation where MSMEs contribute to over 50 per cent of the GDP, and less than five per cent have access to credit within the financial system, DBN’s achievement of these key mandates will impact Nigeria’s development significantly.

“With our flexible loan repayment tenure (up to 10 years with a moratorium period of up to 18 months) and pragmatic pricing (which is referenced to market rates), DBN’s lending model will also address the lapses that affect existing financing models.  

“There are also plans to bring on-board two more MFIs in the pipeline, namely Infiniti MFB Limited and Microed MFB Limited”, he explained. 

In his remarks, the Vice President, African Development Bank, Pierre Guislain, said that AFDB was set to partner DBN to commence second lending process to Micro, Small and Medium Enterprises (MSMEs) in the country.

Guislain assuaged the fears of MSMEs operators that it would not hike the interest rate, taking into cognisance the development of the Nigerian economy as MSMEs possess great potential for empowerment generation and output diversification.

He said that the roles played by MSMES in Nigeria could not be treated with kid gloves in a developing economy like Nigeria, adding that loans would be provided to assist MSMEs.

According to him: “We are happy to see progress in recent months. We are quite comfortable with the process. We have helped to create autonomy with other development partners and we have also contributed in major financial dealings,” he said.