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It was not clear if it was because the report may have been ready before the recent decision of Nigerian Bankers’ Committee to pull over N26bn in aid of growing Small and Medium Enterprises’ (SMEs), otherwise, the latest Zenith Economic Quarterly, a publication of Zenith Bank Plc, has adjudged the new Development Bank of Nigeria (DBN) as the best solution to the SMEs’ financing problem in the country.
The report, recently released averred that owing to the strategic focus of DBN on sustainable economic growth via development financing, SMEs will flourish with easy access to cheap and adequate funding, which the bank provides.
Analysts said why the report may have avoided mention on the new funding plan of the Bankers Committee may stem from possible access bureaucracy and interest rates which SMEs may have to face while access the planned N26bn facility to be pulled by the banks.
Zenith Bank is one of the participating banks in the new funding assistance to SMEs.
Business Hilights recalls that DBN was a new development bank set up via a joint venture between the Federal Government and international development finance institutions, to bring the much-needed change to the SME financing in the country’s economy.
A report by the International Finance Corporation (IFC) recently revealed that in Nigeria, 96 per cent of businesses are the SMEs, compared to 53 per cent in the United States and 65 per cent in Europe.
According to the ZEQ, edited by Marcel Okeke, “Germany’s KfW provided the on-lending model for the DBN. The KfW – the German government-owned development bank, set up as part of the post-World War II Marshall Plan to rebuild the country – is reputed for its conscientiousness in supporting small enterprises”.
“The second largest business unit of the KfW group is KfW’s SMEs bank referred to as the KfW Mittelstands Bank which focuses on the provision of finance and capacity building tools to the SMEs in Germany. Beneficiaries are comprised of individual entrepreneurs as well as start-ups. In 2015, KfW Mittelstands Bank financing totalled €20.4bn.”
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