DBN disburses over N1tn to MSMEs, supports 1.6 million jobs

Business, Entrepreneurship & SMEs

LAGOS, Nigeria (NPA) — The Development Bank of Nigeria (DBN) Plc says it has disbursed more than N1 trillion to over one million Micro, Small and Medium Enterprises (MSMEs), supporting the creation of more than 1.6 million jobs since its inception.

Managing Director of DBN, Dr Tony Okpanachi, disclosed this on Wednesday in Lagos, outlining the bank’s achievements and growth strategy for the next five years.

Okpanachi said the bank’s next phase of expansion would focus on deepening financial inclusion, mobilising additional capital and increasing support for underserved sectors of the economy.

According to him, DBN aims to reach more than two million MSMEs and facilitate the creation of two million direct and indirect jobs over the next five years.

“Our strategic intent over this period is to achieve scale by expanding support for MSMEs and strengthening inclusive economic growth,” he said.

The managing director said the bank is targeting N1 trillion in outstanding loans and plans to issue N500 billion in guarantees under its new strategy. He added that DBN also intends to mobilise N1.3 trillion in debt and equity capital to support its expansion plans.

Okpanachi noted that inclusion remains a key pillar of the bank’s strategy, with 40 per cent of loans earmarked for women-led businesses and 30 per cent reserved for youth-owned enterprises. He added that 15 per cent of disbursements would target MSMEs in underdeveloped geopolitical zones and focus states.

The bank also plans to expand green financing to between N75 billion and N100 billion while training 500,000 MSMEs through its capacity-building programmes.

Reviewing the bank’s cumulative impact, Okpanachi said DBN has onboarded 84 Participating Financial Institutions (PFIs), including commercial banks, microfinance banks, merchant banks and development finance institutions.

He disclosed that women-owned businesses accounted for 77 per cent of beneficiaries, while 28 per cent were youth-led enterprises.

According to him, DBN disbursed N108 billion to more than 132,000 MSMEs operating in economically disadvantaged and conflict-affected states such as Borno, Adamawa, Katsina, Yobe and Zamfara.

In 2025 alone, the bank disbursed over N358 billion to more than 289,000 beneficiaries and onboarded five additional PFIs.

Speaking on the performance of DBN’s subsidiary, Impact Credit Guarantee Ltd. (ICGL), Okpanachi said the company has guaranteed loans exceeding N500 billion since inception.

He noted that ICGL, established in partnership with the World Bank, has supported more than 93,000 MSMEs and small corporates through over 130,000 credit guarantees, helping to sustain more than 203,000 jobs.

The subsidiary has also expanded its reach through partnerships with institutions including the African Development Bank and the European Investment Bank.

On financial sustainability, Okpanachi projected a cumulative five-year profit before tax of about N300 billion.

“We are balancing developmental impact with strong financial performance to ensure DBN remains a sustainable development finance institution,” he said.

He added that the bank has maintained stable supervisory ratings from the Central Bank of Nigeria and retained top credit ratings from Agusto & Co. and GCR Ratings.

Also speaking, Managing Director of ICGL, Mr Anthony Asonye, highlighted the critical role of credit guarantees in improving access to finance for MSMEs.

Asonye described credit guarantees as an effective tool for reducing lending risks and encouraging financial institutions to extend credit to underserved businesses.

He noted that Nigeria’s informal sector, despite contributing significantly to economic growth, continues to face limited access to formal financing due to perceived lending risks.

According to him, Nigeria has about 41 million registered SMEs, contributing between 45 and 49 per cent of the nation’s Gross Domestic Product (GDP), yet receiving less than one per cent of total commercial bank lending.

“SMEs contribute nearly half of our GDP, yet they receive less than one per cent of total banking credit,” Asonye said.

“Banks are often reluctant to lend because many SMEs lack adequate collateral, while prevailing risks in the operating environment push lending rates to between 35 and 40 per cent.”

To address the challenge, he said ICGL operates a World Bank-backed credit-collateral substitute scheme designed to de-risk lending to MSMEs.

He explained that the scheme provides silent guarantees to commercial banks, covering up to 60 per cent of default risk for standard loans and up to 75 per cent for businesses owned by women and young entrepreneurs.

“Our guarantee is a first-class, cash-backed collateral substitute,” he said.

“Commercial banks can deploy more assets to the SME sector with confidence, knowing there is a reliable backstop. It is a silent guarantee designed to minimise moral hazard while incentivising lending to the real drivers of the economy.” (NAN)