President Goodluck Jonathan on Monday officially launched the Development Bank of Nigeria (DBN).
Though Jonathan observed that small and medium enterprises had always been the backbone of the nation’s economy, he however said the sector never had the opportunity of accessing cheap funds for its development.
According to the president, there exists over 17 million Micro, Small and Medium Enterprises (MSMEs) across the country which employ over 32 million people while contributing over 45 per cent to the Gross Domestic Product (GDP).
He stressed that existing developmental institutions in the country included the Bank of Industry (BoI) and other commercial banks which could not satisfy the funding needs of the MSMEs, hence the establishment of the DBN.
The president spoke at the launch held at the Banquet Hall, Presidential Villa.
“Access to long term finance has been a challenge for the MSMEs. Most MSMEs cannot get long term funds from banks and other financial institutions, forcing them to spend on personal savings, friends and family for loans.
“These loans are typically short term and come at a high interest rate, thereby stemming the growth of these businesses,” Jonathan said.
The president, however, seized the opportunity to launch his campaign handbook titled; ‘Jonathan’s Next Four Years,’ encapsulating his visions for the country should he be re-elected.
The Coordinator for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, explained that the establishment of the bank was for a robust finance backing for small and medium enterprises.
According to her, the wholesale developmental institution plans to offer loans to at least 20,000 beneficiaries in the first one year of its operations and is billed to start business in the next nine months.
The Federal Executive Council (FEC) recently approved a multi-donor credits from the International Bank for Reconstruction and Development of the World Bank, Africa Development Bank, Germany and French Development Agency in the sums of $500 million, $450 million, $200 million and $130 million for the establishment of the DBN.