‘Development Bank’s Inclusive MSME Financing Model Bridges Credit Gaps’

The Development Bank of Nigeria Plc (DBN) has established an inclusive financing model that effectively bridges credit gaps and empowers women and youth within the Micro, Small, and Medium Enterprises (MSME) sector, according to financial consultant Adegboyega Bashir.

Bashir emphasised that DBN’s unique approach has played a vital role in supporting MSME growth across the country by facilitating access to funds, building capacity, and fostering job creation.

He noted that contrary to recent criticisms in the media, he highlighted the bank’s substantial impact, including the creation of an estimated 1.2 million jobs that benefit households and value chains nationwide.

Unlike commercial banks, DBN operates as a wholesale development finance institution, channeling funds through Participating Financial Institutions (PFIs) such as Deposit Money Banks, Microfinance Banks, and other financial entities.

The bank does not lend directly to MSMEs but empowers entrepreneurs through targeted capacity-building programs. These initiatives equip business owners with essential skills in credit management, accounting, sustainability, and marketing. After training, MSMEs are able to access loans from PFIs at more favorable terms, including lower interest rates compared to conventional lenders.

This financing model addresses the common barriers MSMEs face when seeking credit, such as poor collateral or lack of credit history.

As of December 31, 2024, DBN had disbursed over N1 trillion through 79 PFIs to 721,819 MSMEs across Nigeria. Notably, 76 per cent of the credit beneficiaries are women-owned businesses, while 26 per cent  are led by youth, demonstrating the bank’s commitment to inclusivity and economic empowerment.

Beyond financing, DBN has invested heavily in knowledge transfer through its DBN Enterprises Training Programme (DBNETP), which has trained more than 9,500 MSMEs in 12 cities across the six geopolitical zones.

The bank also enhances the financial ecosystem by providing training to PFIs via its Community of Practice Programme, benefiting over 35 institutions and bringing a total of 79 institutions into the MSME financing network.

Bashir noted that DBN’s inclusive financing and capacity-building initiatives continue to strengthen Nigeria’s MSME sector, driving sustainable growth and economic development for communities nationwide.