News Column

FG to Establish Development Finance Institution

August 20, 2014

Chesa Chesa

The Federal Government plans to establish a wholesale Development Finance Institution (DFI) to provide long-term funds for industrial development.

President Goodluck Jonathan announced this on Tuesday in Abuja during the official disbursement of the Central Bank of Nigeria (CBN)'s N220 billion funds for the development of micro, small and medium enterprises (MSMEs) in the country.

The President explained that the proposed institution was part of measures to enhance the contribution of MSMEs to the country's economic growth and development.

According to him, the impending DFI would provide long-term finance spanning up to 15 years for relevant entrepreneurs and industrialists especially people involved in tree-crops production.

Jonathan also disclosed plans by the Federal Government to restructure existing development finance institutes for better performance and improved access to finance by MSMEs.

He pointed out that "MSMEs are recognised all over the world as engine of growth in any development oriented economy.

"Besides their inherent labour intensive production processes, they also provide a viable platform for job creation globally.

"All over the developed world the contributions of MSMEs to GDP (Gross Domestic Product) average about 47 per cent; this shows clearly how important MSMEs are to us.

"As reported by SMEDAN (Small and Medium Enterprises Development Agency of Nigeria), there are about 17.3 million SMEs in Nigeria.

"However, this is quite small compared to countries like Indonesia that is slightly more than us in terms of population, but they have about 40 million. So, we must also get there and even go beyond."

The President emphasised that a vibrant MSMEs subsector was key to achieving sustainable transformation of the Nigerian economy.

For more stories on investments and markets, please see HispanicBusiness' Finance Channel

Source: AllAfrica

Story Tools Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters