Development Bank of Nigeria (DBN), said it has evolved a Green Strategy to enhance governance practices in the Medium, Small and Micro Enterprises (MSMEs’) space in terms of better bookkeeping to increase access to funding, upskilling for improved business operations and administration, and job creation.
Specifically, the Development Finance Institution (DFI), said the Green Strategy is a part of its proposition to identify relevant markets and opportunities with the Participating Financial Institutions (PFIs) for green investments by building their technical capacities to create products to meet the needs of MSMEs across sectors.
Speaking more about the initiative with Sustainable Economy, DBN’s Sustainability Specialist, Lolade Awogbade, said the Bank has signed a number of Memoranda of Understanding (MoU) with some partner organisations to create a huge impact among various markets.
“The idea is also for DBN to be seen as actively creating impact. We want to see results in terms of businesses are being structured in the right way to seek the financing that they need. We want to see that the PFIs also create products that can attract MSMEs in that green area. For us, green will cover a lot of things from gender, power with regards to renewable energy and that whole space is what we have defined as green – access to finance, reduction in carbon emission, and be able to create jobs directly and indirectly,” she said.
In line with the impact creation objective, she disclosed that DBN signed an MoU with the Rural Electrification Agency (REA), to expand rural electrification and access to power among the rural communities to boost economic activities. “It is important for us as part of our strategy to tie-in the things DBN is doing and what the government is doing in terms of commitment under the Paris Agreement.”
This capacity-building programme covers everything from operation to internal structuring, to accounting – teaching them how to manage their books, and teaching them how to manage their people. Increasingly, it is including sustainability options and digital technology options.
Expatiating more on the green conversations with the MSMEs, she said focus is based on DBN’s three main mandates – providing credit through the PFIs to the banks – Micro-Finance and Deposit Money Banks; technical assistance through upskilling and training for PFIs and MSMEs; and providing credit guarantees through its subsidiary company, Impact Credit Guarantee Ltd.
In terms of capacity-building for the MSMEs, she said DBN, in partnership with the Enterprise Development Centre (EDC), of the Pan-Atlantic University (PAU), Lekki, Lagos, and reputable management consultants, developed several modules and courses to train MSMEs over a three-month programme, which is run annually.
She explained: “This capacity-building programme covers everything from operation to internal structuring, to accounting – teaching them how to manage their books, and teaching them how to manage their people. Increasingly, it is including sustainability options and digital technology options. These are what DBN has tried to do in terms of the challenges that MSMEs face in accessing the loans. We do these programmes for free.”
Beneficiaries of these programmes are derived from a selection process based on specific criteria to ensure that only the serious-minded MSMEs benefit from the training.
“…as a DFI, it is one of our duties to ensure that we provide the learning opportunities, and because we have seen the challenges that exist in the market, we are putting our foot forward to say: ‘we want to help MSMEs out there.’ The hope is that in the future when the MSMEs approach the banks, maybe the banks will say: ‘show us evidence that you’ve completed X, Y&Z course on the DBN platform’; then they know that you know what you are talking about.”
Going forward, she said based on the feedback, DBN plans to extend the capacity-building now in its third year to accommodate more MSME operators, as according to her, “…entrepreneurs, who have been on the programme have seen a significant shift – one, in their thinking; two, in their practices; and three, in the seriousness they are now accorded by the banks.”