The Development Bank of Nigeria (DBN) has called for a sustained support and improved access to finance for Micro, Small and Medium Enterprises as a means of managing the growing employment need in the country and to address the global domestic population explosion.
Chairman of DBN, Dr Shehu Yahaya, made this call when Queen Maxima of Netherlands and the United Nations Secretary-General’s Special Advocate for inclusive finance for Development visited the bank in Abuja.
Dr Shehu Yahaya implored the Queen to use her office to push urgently for increased access to finance for Micro, Small and Medium Enterprises (MSMEs) in order to enhance financial inclusion.
His words, “I will start by providing context to the situation that will confront the world over the next 20 to 50 years if strategic and sustained support is not afforded MSMEs as a critical segment of any economy. The current world population of 7.3 billion is expected to reach 8.5 billion by 2030, 9.7 billion in 2050 and 11.2 billion in 2100. To manage this growth, 600 million jobs are needed over the next 15 years to absorb a growing global workforce”.
“The employment need in Nigeria will be 30 – 40 million jobs by 2030 (mostly to be provided by MSMEs) and currently, 50 per cent of Nigeria’s GDP is attributed to SMEs and this is expected to grow to 70% in 2050. There are over 37 million MSMEs in the country. However, less than 5 per cent of these businesses have access to credit in the financial system”, he added.
The DBN chairman noted that, “MSMEs are collectively the largest employers in many low-Income countries including Nigeria, yet their viability is being threatened by lack of access to risk management tools such as savings, insurance and credit. Their growth, he said, “is often stifled by restricted access to credit, equity and payments services.”
On a brighter note however, he noted that “global pursuit of financial inclusion as a vehicle for economic development has had a positive impact in Nigeria to some degree as the exclusion rate reduced from 53% in 2008 to 46.3% in 2010.”
The Dutch Queen was informed that DBN has commenced lending operations with the provision of over N5 billion to three National Microfinance banks for onward lending to 20,000 MSMEs across every sector of the economy.
Yahaya told the Queen that DBN “believes that access to appropriate levels of financial services in the MSME segment can boost job creation, raise income, reduce vulnerability and increase investment in human capital.
The DBN Chairman then appealed to the UN Secretary General’s Special Advocate “to emphasize to relevant authorities the importance of strong corporate governance and no political interference in the operations of DBN as key success factors.
Responding, Queen Maxima said she was at DBN to understand what the bank is doing and use her office to support and help in the success of financial inclusion as well as show best practices required to achieve financial inclusion.