DBN Disburses Over N1tn to Nigerian MSMEs, Supports 1.2m Jobs Amid Calls for Broader Access to Credit

The Development Bank of Nigeria (DBN) says it has disbursed over N1 trillion to Micro, Small, and Medium Enterprises (MSMEs) across Nigeria, a significant milestone that the bank says has supported more than 1.2 million jobs nationwide.

The bank’s Managing Director, Tony Okpanachi, disclosed this while speaking to the News Agency of Nigeria (NAN) on the sidelines of the African Development Bank (AfDB) Annual Meetings in Abidjan, Côte d’Ivoire.

The DBN boss described the feat as a landmark in the institution’s mission to deepen access to finance for Nigeria’s small businesses, which form the backbone of the country’s economic activity. He attributed the bank’s impact to its wholesale lending model that disburses funds through commercial banks and microfinance institutions, which then provide credit to MSMEs across different sectors.

“We are proud to report that at the end of 2024, DBN had disbursed over N1 trillion to MSMEs through our partner financial institutions. The support has helped to stimulate economic activity and improve livelihoods, especially at the grassroots. In terms of job creation, we have been able to support over 1.2 million jobs directly and indirectly,” Mr Okpanachi said.

While the progress is notable, the DBN chief admitted that Nigeria’s MSME financing gap remains vast. According to a report by the International Finance Corporation (IFC), over 40 million MSMEs operate in Nigeria, but less than 5% have access to adequate credit. The World Bank estimates Nigeria’s MSME credit gap to be more than $158 billion, a figure that underscores the magnitude of the challenge.

In a country where unemployment officially stands at 5% (using the NBS rebased methodology) but underemployment and informal employment remain widespread, MSMEs provide jobs for over 80% of the workforce and contribute nearly 50% of Nigeria’s GDP. However, their growth is often hindered by a lack of access to affordable capital, poor infrastructure, regulatory red tape, and limited technical capacity.

Mr Okpanachi noted that the DBN is addressing these challenges not only through funding but also through capacity-building programs for MSMEs, including financial literacy, entrepreneurship training, and digital tools to help formalize businesses and prepare them for credit.

“The need is massive and we are not resting on our oars. There is still much more to be done to close the access gap and expand our reach,” he said.

He also called for more policy reforms, public-private collaboration, and innovative financing models such as blended finance to crowd in private investment into the MSME ecosystem.

The experience of other economies underscores the critical role that targeted credit support for MSMEs can play in national development. In South Korea, government-backed credit guarantee schemes and development banks like the Industrial Bank of Korea (IBK) helped small businesses scale during the post-war industrialization era, contributing to the country’s emergence as a global manufacturing powerhouse.

In Germany, the KfW Development Bank continues to provide billions of euros annually in subsidized loans to small businesses, a strategy that has helped maintain its strong Mittelstand (medium-sized enterprises) sector—considered the engine of the German economy.

Similarly, in China, MSMEs contribute more than 60% of GDP and 80% of urban employment. The Chinese government, through state-owned banks and a robust credit system, has facilitated massive lending to small businesses, enabling innovation, job creation, and export competitiveness.

Nigeria’s case is different due to structural challenges, including a volatile currency, high interest rates, weak credit reporting systems, and a trust gap between lenders and informal businesses. However, institutions like DBN are attempting to bridge that divide by partnering with financial institutions and offering partial credit guarantees to reduce lenders’ risk exposure.

Okpanachi also used the platform to commend the outgoing AfDB President, Dr Akinwumi Adesina, for a decade of transformation at the multilateral institution.

“Under Adesina, AfDB has nearly tripled its capital base and disbursed more in ten years than it did in its first 50 years. That is no small feat,” he said.

DBN was established in 2014 and became operational in 2017 as a wholesale development finance institution focused on providing long-term financing to MSMEs through eligible financial intermediaries. It is backed by the Nigerian government in partnership with the World Bank, African Development Bank, European Investment Bank, and other development partners.

Though the bank’s N1 trillion milestone is commendable, it only scratches the surface of what is needed to unlock the full potential of MSMEs in Nigeria. Analysts and business leaders believe that further scaling of DBN’s interventions, complemented by broader economic reforms, could be key to creating jobs, reducing poverty, and fostering inclusive growth in a country with one of the world’s fastest-growing populations.

As inflation and operating costs continue to squeeze small businesses, stakeholders say that ensuring affordable credit remains accessible is not just a development objective—it is a necessity for economic survival.