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Development Bank: Sustained support to MSMEs will tackle unemployment

Development Bank: Sustained support to MSMEs will tackle unemployment
November 13
19:48 2017

The Development Bank of Nigeria (DBN) says sustained support and improved access to finance for micro small and medium enterprises (MSMEs) is a means of tackling unemployment and addressing global population explosion.

Shehu Yahaya, chairman of DBN, said this when Queen Maxima of Netherlands and the United Nations secretary-general’s special advocate for inclusive finance for development visited the bank in Abuja.

Yahaya said 50 percent of the country’s gross domestic product (GDP) is attributed to SMEs.

The DBN chairman also noted that only less than five percent of these businesses had access to credit in the financial system.

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“I will start by providing context to the situation that will confront the world over the next 20 to 50 years if strategic and sustained support is not afforded MSMEs as a critical segment of any economy,” he said.

“The current world population of 7.3 billion is expected to reach 8.5 billion by 2030, 9.7 billion in 2050 and 11.2 billion in 2100.

“To manage this growth, 600 million jobs are needed over the next 15 years to absorb a growing global workforce.

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“The employment need in Nigeria will be 30 – 40 million jobs by 2030 (mostly to be provided by MSMEs) and currently, 50 percent of Nigeria’s GDP is attributed to SMEs and this is expected to grow to 70 percent in 2050.

“There are over 37 million MSMEs in the country. However, less than five percent of these businesses have access to credit in the financial system.

“MSMEs are collectively the largest employers in many low-income countries including Nigeria, yet their viability is being threatened by lack of access to risk management tools such as savings, insurance and credit. Their growth, he said, “is often stifled by restricted access to credit, equity and payments services.”

He said DBN had commenced lending operations with the provision of over N5 billion to three national micro-finance banks for onward lending to 20,000 MSMEs across every sector of the economy.

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