The Minister of Finance Budget and National Planning, Dr. Zainab Shamsuna Ahmed has disclosed that the Development Bank of Nigeria (DBN) disbursed a total of N482 billion to youths and women owned 208,000 Micro Small and Medium Enterprises within a year.
Zainab made the disclosure during the third Annual Lecture Series of DBN held in Abuja on Thursday.
The Minister said, “The Development Bank of Nigeria in collaboration with key partners are to address the Financial challenges facing Micro Small and Medium Enterprises (MSMEs) through loans facilities to them and train them on self reliance in the country.
“The DBN has been identified as key contributor to unlocking the capacity of MSMEs towards achieving economic growth in the country. According to the International Data between 70 to 95 per cent of employment opportunities are created by MSMEs to ensure the effectiveness of the economy.
“It’s imperative to ensure that MSMEs are supported in acquisition of skills and tools to run their businesses efficiently and manage risks and access to finance among others. The World Bank estimates the financing gap among former microeconomics to be 18 percent of the GDP with potential demands for financing among informal MSMEs as high as 11 percent of the GDP.
“This underscores the important roles played by the Development Bank of Nigeria in facilitating access to finance. The total money disbursed is N482billion to 208,000 MSMEs in 2021, out of which 27 per cent are youths owned enterprises, while 66 per cent are enterprises owned by women.”
According to her, the DBN has continued to be a major driver of MSMEs in our country.
The Minister stressed that the Federal Government has contributed enormously to the growth of MSMEs through tax reduction in the nation.
She said, “According to the report by the Small and Medium Enterprise of Nigeria in collaboration with with National Bureau of Statistics in January, 2022, MSMEs accounts for 96.7 per cent of businesses and also contributes 46.3 per cent to the nation’s Gross Domestic Product (GDP).
“However, it only accounts for 6.21 per cent of gross exports within the economy and a total of 6,195,473 persons were engaged in MSMEs in Nigeria. The relatively low contribution of MSMEs to gross export is a concern to us, giving its norminal contribution to GDP, and for these reasons, urgent steps are being taken to curb the concerns.”
The Minister stated the policies of the ministry to support the MSMEs sector has been contained in the Finance Act as they have successfully prepared it and have reached the advanced stage of the 2022 Finance Act.
She revealed that the Finance Act is designed to amend relevant taxes, excise duty and any other duty or incentive to boost local manufacturing activities in the country.
“The Finance Act in section 40 of Industrial Development Income Tax has been amended to grant tax exemption to small businesses and low income companies. So, companies that have a turnover for 25 per cent are now placed on zero company income tax.
“While section 1 of the income tax has amendment for tax holiday to MSMEs for four years to enhance their productivity.”
The Minister however tasked the development bank to step up their activities in synergy with other funding institutions to encourage more local firms in the country.