The Development Bank of Nigeria in partnership with the German Development Agency (GIZ) and the Equipment Leasing Association of Nigeria (ELAN) has launched the equipment leasing initiative to enhance access to capital for operators of micro, small and medium-size enterprises across the country.
The initiative, according to the organisations, aims to drive business expansion and facilitate technological upgrades as it enhances MSMEs financing.
Moreover, it’s poised to raise awareness and foster the adoption of leasing practices among MSMEs, opening up new avenues for growth and development in the sector.
Speaking during the launch which was held in Lagos recently, Bonaventure Okhaimo, chief operating officer of the DBN, said the bank is excited about the partnership, while also emphasising the impact it will bring to the business ecosystem of Nigeria.
Okhaimo noted that the development bank is willing to see that members of ELAN and the Private Funds Institutions (PFI’s) get access to loans through a less strenuous process.
He, however, noted that the eligibility status of each PFI will be clearly stated.
“I’ve never seen Nigerian MSMEs suffer this much. Within the same period, after COVID-19, we had the naira redesign policy, subsidy remover, and a lot of other hindrances,” Okhaimo said.
He added that the development bank sees growth with the partnership and is confident that both ELAN and MSME owners will benefit tremendously from it.
“Our vision is to be a Nigerian primary product and the growth that we are promoting is more around facilitating sustainable socio-economic development and MSMEs,” Okhaimo assured.
Also, Okhaimo said over N790 billion in loans was disbursed to MSMEs in 2023, noting that the bank plans to double that figure by disbursing over N1 trillion in 2024. He went on to say the target audience of the DBN was females and youths in small and medium businesses.
On the risk attached to the loaning scheme, he noted that loan risks are shared by both the DBN and PFI.
On the kind of collateral involved, he noted that the level of risks involved in the loans determines the collateral attached to it.
Akinwande Pearse, technical advisor at GIZ Nigeria, said the purpose of the leasing initiative with DBN and ELAN is to further help MSMEs in raising funds that would be used to get more leasing equipment, as well as boycott the hiking interest rates of commercial banks.
“The focus for this initiative is MSMEs and the fact that they require equipment to carry out their day-to-day businesses and many will have to resort to getting loans from banks to purchase some of this equipment. However, the repayment structures are usually a challenge,” Pearse said.
Pearse said the role of GIZ Nigeria is for MSMEs to acquire productive equipment, and productive assets for using their businesses to enhance their competitiveness within the business space and the general growth and development of MSMEs in Nigeria.
Similarly, Markus Wauschkuhn, cluster coordinator at the sustainable economic development cluster(SEDEC), reiterated that together with GIZ Nigeria, SEDEC will be training MSMEs owners, equipping them with resources needed for them to function properly in the business ecosystem in Nigeria.
He said the agency is aware of the struggles the MSMEs face in acquiring loans from commercial banks and is confident that the partnership with the Development Bank of Nigeria will see that loans are no longer a major problem for them.
“Our role as a development agency in collaboration with partners on the Nigerian side, the federal government, but also on the state level here in Lagos, is to reach out to MSMEs; to train them, to access financial literacy and business skills programmes to make them more capable of dealing with what they face in the future,” Wauschkuhn said.
Andrew Emonuwa, executive secretary for the Equipment Leasing Association of Nigeria said the partnership with the Development Bank of Nigeria, is to further amplify the works of the leasing organisation while enabling them to help more MSMEs obtain a longer leasing tenure.
Emonuwa said through the development bank and GIZ Nigeria, the association believes that more MSMEs will be assisted with the equipment they need to run a successful business.