No fewer than 321,867 Micro Medium and Small enterprises have enjoyed wholesale funding of $1.4bn in six years, the World Bank said in a report on Friday.
The report titled, ‘Tackling access to finance for micro, small and medium enterprises’, said the funds disbursed through the Development Bank of Nigeria were to provide long-term loans and risk-sharing facilities to small enterprises, of which 66 per cent were women-owned, and 12 per cent first-time borrowers.
The bank said access to finance remained a major, longstanding obstacle faced by micro, small and medium enterprises in Nigeria.
It stated, “Access to finance is a major, long-standing obstacle faced by micro, small, and medium enterprises in Nigeria. In 2014, only 6.7 per cent of enterprises reported having a loan or active line of credit.
“MSME loans averaged about five per cent of total commercial bank lending by volume and were equivalent to only two per cent of banking-sector assets. Even today, the private credit-to-GDP ratio remains low and concentrated in the oil and gas sector and large, ‘blue-chip’ conglomerates. Although MSMEs are the backbone of the Nigerian economy, limited access to finance severely constrained their growth.”
This challenge made the finance ministry request World Bank support in launching the Nigeria Development Finance Projects with a $500m loan support.
