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N500bn MSME loans: Why Lagos, others got larger share – DBN

The Development Bank of Nigeria (DBN) on Wednesday denied lopsidedness in the disbursement of its N500bn loans to Medium and Small Scale Enterprises across the country. …

The Development Bank of Nigeria (DBN) on Wednesday denied lopsidedness in the disbursement of its N500bn loans to Medium and Small Scale Enterprises across the country. 

DBN Managing Director, Tony Okpanachi,  appeared before the Senate ad-hoc committee investigating the alleged uneven disbursement of the loan to six geopolitical zones in 2021.

Figures from the DBN showed that only 11 percent of the loan went to the 19 northern states; while Lagos alone got 41 percent. 

Okpanachi said the loan beneficiaries appeared to be more in the southern part of the country because of the criteria used for the disbursement. 

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He said for a business to qualify for the DBN loan, it must have less than 250 employees and must not have done a turnover of more than N1.1bn. 

He said the location of the registered MSMEs in Nigeria also explained the reason for the loan’s disbursement. 

He said out of the registered MSMEs across Nigeria, Lagos alone  has 25%; South West, 23%; South-South, 18%; South East, 10%; North Central, 10%; North West, 9%; FCT, 4% and North East, 2%. 

He said DBN had asked participating financial institutions to build the capacity of small scale businesses and train them on how to structure their businesses for them to be able to access the loan. 

He said the DBA also observed issues with interest-based banking and loans in the north. 

“So, we’ve engaged two non-interest banks in Nigeria to cater for that region,” he said. 

Meanwhile, the committee threatened to issue warrant of arrests on the governor of the Central Bank of Nigeria, Godwin Emefiele and heads of affected financial institutions for failing to honour its invitation.