World Bank provides $1.4bn financing to 321,867 MSMEs in 6yrs
World Bank has disclosed that over 321,867 Micro, Medium and Small Enterprises (MSMEs) operators have enjoyed wholesale funding of $1.4bn in six years.
The bank which disclosed this in its report titled; ‘Tackling access to finance for micro, small and medium enterprises’, said the funds disbursed through the Development Bank of Nigeria (DBN) were to provide long-term loans and risk-sharing facilities to small enterprises, of which 66 per cent were women-owned, and 12 per cent first-time borrowers.
The bank said access to finance remained a major, longstanding obstacle faced by micro, small and medium enterprises in Nigeria.
“Access to finance is a major, long-standing obstacle faced by micro, small, and medium enterprises in Nigeria. In 2014, only 6.7 per cent of enterprises reported having a loan or active line of credit.
“MSME loans averaged about five per cent of total commercial bank lending by volume and were equivalent to only two per cent of banking-sector assets. Even today, the private credit-to-GDP ratio remains low and concentrated in the oil and gas sector and large, ‘blue-chip’ conglomerates. Although MSMEs are the backbone of the Nigerian economy, limited access to finance severely constrained their growth.”
“The DBN has earned a reputation for being even-handed, highly responsive, and innovative among its 28 Partner financial institutions. Key project achievements include a wholesale funding to PFIs amounting to the naira equivalent of $1.4bn, on-lending to 321,867 MSMEs, of which 66 per cent are women-owned, and 12 per cent are first-time borrowers.
The banks also supported over 28,000 MSMEs with guarantees equivalent to $195m through its wholly-owned subsidiary, Impact Credit Guarantee Limited, established in 2020.”
