The KFW Development Bank has contributed €25 million to the development of micro, small, and medium-sized enterprises (MSMEs) and the renewable energy sector in Nigeria through the Development Bank of Nigeria (DBN) Plc as part of its efforts to revive the country’s flagging economy.
Tony Okpanachi, the managing director and CEO of DBN, commented on the events at the DBN office in Lagos, stating that KFW has consistently supported Nigeria’s economy in a number of areas and expressed a desire to see MSMEs and the energy sector recover.
He declared: “We recently inked an arrangement for a €25 million credit line that KFW is providing to DBN to fund MSMEs. As a wholesale DFI, we are positioned to give MSMEs access to credit by lending money in bulk to other microfinance banks and financial institutions. We give them wholesale money so they can lend to MSMEs further.
He went on to say that DBN already has 65 financial institutions that help MSMEs and are aligned with green and renewable energy, thereby directly assisting small enterprises.
He stated that the bank would oversee and assess the procedure.
“We sit down with customers and discuss how they use the funds and how it has impacted their businesses. By the time we provide them the Line and they come to draw on the line, we will know which customers they are lending to directly.” We will be keeping an eye on our funding partners throughout the entire process, not just giving them money and then going back to sleep.
The effect on people and the economy is what matters most, he stated. The banker was upbeat about the funding and assured that the partners (financial institutions) would provide regular reporting feedback when they drew the line.
He added the banks would make the final decision on costs as they assume the credit risks. He did point out that there would be no problems with the requirements or conditions to obtain credit.
As the cornerstone of every economy, MSMEs are in an intriguing period right now. They would grow their firms, add jobs, and increase our GDP with this financing. We at DBN strive to provide access to finance in various areas and, in light of the challenging economic climate, we support moratoriums and longer terms for MSMEs. This allows their firms to stabilize and grow before they become unable to make payments," the speaker said.
According to Pierre Annutsch, Senior Portfolio Manager (Equity Investment/Funds, sub-Saharan Africa and Latin America) at KFW, the financial institution would keep providing the Nigerian economy with a variety of forms of support.
