Respite is on the way for Nigeria’s Power sector and MSMEs, as the KFW Development Bank and not less than 65 Financial institutions commit to enhancing the institution. The KFW Development Bank, through the Development Bank of Nigeria (DBN), will inject € 25 million into Nigeria’s micro, small, and medium enterprises (MSMEs) and renewable energy sector.
According to DBN’s Managing Director/CEO, Tony Okpanachi, KFW has always supported Nigeria’s economy in various sectors and is keen to see MSMEs and the energy sector bounce back. The DBN Boss noted that “Today, we just signed an agreement for a credit line of €25m provided by KFW to DBN to finance MSMEs. We are wholesale DFI poised to provide access to credit to MSMEs through wholesale lending to financial institutions and other microfinance banks. We provide them with the wholesale funds to onward lending to MSMEs.”
He added that DBN already has 65 financial institutions in line with green and renewable energy and businesses in MSMEs that relate directly with the small businesses to support them. Toni said the bank would be monitoring and evaluating the processes, ensuring proper utilization of the funds, and seeing how it would impact the economy.
“By the time we provide them with the line, and they come to draw on it, we will know which customers they are lending to directly. We sit down with customers and discuss and find out how they utilize the funds and how it has impacted their businesses. We are not just disbursing funds to our financing partners and relaxing. We shall monitor them throughout the process. The ultimate end is the impact on them and the economy,” he said.
The banker expressed optimism about the funding, saying there would be regular reporting feedback from the partners (financial institutions) when they draw the line. As for cost, he said the banks would decide because they bear the credit risks. However, he noted that the criteria and conditions to access credit would be seamless. On his part, the senior portfolio manager (Equity Investment/Funds, sub-Sahara Africa and Latin America) for KFW, Pierre Annutsch, said the financial institution would continue to support the Nigerian economy in diverse ways.
