IT IS CERTAINLY, NOT ABOUT ALWAYS OPENING NEW DOORS that matter, but about fixing existing doors. Despite what bank adverts say, many banks are not interested in financially supporting small businesses. The major frustration small business entrepreneurs are going through in growing their businesses in Nigeria is easy access to funding.  A bank becomes one of the best, not because it is a bank, but its relationship with customers, that counts.

Operators of about 37 million Micro, Small and Medium Enterprises, MSMEs, in Nigeria, have consistently vented their spleens about their unfavourable operational environment in the country – from what they described as unreasonable lending standards, to banker’s arrogance in granting MSMEs access to funds to grow their businesses.

Opinions, in high and low places, are interspersed about how to rapidly grow MSMEs in the country. Nigeria’s Vice President, Yemi Osinbajo, on a recent visit to Ilorin, Kwara State, in Nigeria’s north-central, said government would float “Peoples Money Bank” in the country during the year.  The bank, when established, will have branches in Nigeria’s 36 states federation, to enable traders and artisans access credit facilities.

Whether Osinbajo’s proposed “Peoples Money Bank” will be operationally different from the “Peoples Bank” established by former Military President Ibrahim Babangida was uncertain. The Peoples Bank, under Babangida, was managed by renowned educationist and social critic, Tai Solarin, as Chairman. The bank was saddled with the responsibility of providing credit facilities to poor Nigerians who could not access funds from commercial banks. Babangida’s Peoples Bank made insignificant impact on it mandate to support poor Nigerians.


Run-up to Nigeria’s 2019 general elections, towards the end of 2019, Vice President Osinbajo, embarked on the distribution of N10,000 from the country’s wealth tagged “Trader Money” to selected few poor Nigerians.  Osinbajo visited few urban cities markets in Abuja, Lagos, etcetera, sharing the money to those government described as “poorest of the poor”, in efforts to alleviate poverty.

Osinbajo and government approach in moving from one public market to another, distributing N10,000 to traders from the nation’s wealth, in the guise of alleviating poverty, did not go down well with critics of the government.  Former President Olusegun Obasanjo, quoting Bode George, described Osinbajo’s action as “obscene display of executive recklessness and abuse of office”.

The arguments of critics of Osinbajo’s action on “Trader Money” action, were that traders in rural and sub-urban areas of Nigeria are many more than those in urban areas, and are much poorer than traders in Lagos, Abuja and other cities, where “Trader Money” were paraded; and they needed more attention and greater financial support. Government was undaunted by superior opinions on the vice president’s action, and the distribution of “Trader Money” continued.


Wednesday, in Abuja, at a news conference organised to mark 2019 “World MSMEs Day”, Umar Dikko, Director-General, Small and Medium Enterprises Development Agency of Nigeria, SMEDAN, called for the establishment of MSMEs Development Bank to, specifically, address funding challenges confronting MSMEs in Nigeria. How far Dikko’s call would go, will be a matter of time.

Nigerian government, in 2015, established Development Bank of Nigeria, DBN, in collaboration with foreign development partners. The bank commenced operation in 2017.  Government objectives for establishing DBN, is to alleviate financing constraints faced by Micro, Small and Medium Enterprises, MSMEs, and small Corporate Organisations in Nigeria, through provision of financing and partial credit guarantees to eligible financial intermediaries on a market-conforming and fully financially sustainable basis.

October 30, 2017, DBN commenced lending. It made available N5 Billion to two Micro Finance Institutions, MFIs, for lending to over 20,000 MSMEs across the nation.  Perhaps, to enhance its operations, DBN integrated 6 Commercial Banks and 8 Micro Finance Institutions, bringing the total number of Participating Financial Institutions to 14, since it commenced operations. On its website, DBN stated that it has impacted on 35,000 MSMEs and disbursed N31,364,000,000 to MSMEs, as the time of this report.

How Dikko’s proposed MSMEs Development Bank, and Vice President Osinbajo’s Peoples Money Bank would be different from the objectives of Development Bank of Nigeria, DBN, is uncertain. But, Dikko said: “The bank should complement existing products and services offered by commercial and other banks through comprehensive and integrated financial and business advisory services. Its primary role should be to contribute toward the growth of sustainable MSMEs in Nigeria”.


Presently, over 37 million MSMEs are operating in the country, while less than five percent have access to credit facilities from Nigeria’s financial system, to fund their businesses.  Dikko said MSMEs employed 57.7 million persons representing 84.02 percent of labour force, contributing 48.47 percent to Gross Domestic Product, GDP, and 7.27 percent to export.

Nigeria is amazingly blessed with economic resources. Trickling the benefits of MSMEs down to the poor, should be a matter of consistent deliberate policy.  It seems the reverse is the case.  Despite the nation’s wealth, poor Nigerians are entwined by severe financial crisis in carrying out their businesses.  Good governance, consistent and focused economic reforms on MSMEs could restore the nation’s fortunes.

As Dikko said, MSMEs are the “backbone of every economy globally”.  It accounted for “90 percent of businesses and 60 percent to 70 percent of employment worldwide”, and play “pivotal role in stimulating the economic growth, supporting inclusive growth, creating jobs and key vehicle in poverty reduction and improving livelihoods’’.