20,500 Nigerian MSMEs benefits from $1.1bn AfDB funding’
By Chris Agabi
Some 20,500 Nigeria micro, small and medium term enterprises (MSMEs) have benefited from about $1.1 billion funding from the African Development Bank (AfDB).
The President, African Development Bank (AfDB) Dr. Akinwumi A. Adesina disclosed this at the African SME Immersion Fund Roundtable Event by Access Bank Plc. He spoke on “Enhancing the Capabilities of MSMES in Africa – The Role of DFIs.”
He was represented at the event by Lamin G. Barrow, the Director General, Nigeria Country Department African Development Bank
He said “In Nigeria, the Bank has 8 active lines of credit (LOCs) targeting SMEs valued at $1.1 billion. Our interventions have supported over 20,500 MSMES and have contributed to the creation of over 440,000 jobs, with women and the youth accounting for 60%.
He also indicated that the bank has also launched the Affirmative Finance Action for Women in Africa (AFAWA) as a flagship initiative to close the $42 billion access to finance gap for women led and owned SMSEs.
He explained that through AFAWA, the Bank will facilitate up to $5 billion in credit access to women SMEs by 2026.
Adesina noted that this will be achieved by: “Enhancing access to financial services by leveraging our LOCs, trade finance and equity participations to ensure that a percentage of these investments are targeting women empowered SMEs. The AFAWA guarantee mechanism deployed in partnership with the African Guarantee Fund de-risks lending to women SMEs; Enhancing knowledge for financial institutions to develop products and services targeting women led or owned SMEs, and at the same time provide capacity building services for women SMEs to enhance financial literacy and managerial skills, thereby enhancing their bankability. To date, over $800 million in investments have been approved for on-lending to 3,000 women SMEs in 23 African countries, including Nigeria; and Policy reforms to foster inclusive and gender responsive solutions for women SMEs.”
He also indicated that the AfDB’s “Africa SME Program will channel $150 million funding to SMEs through FIs across Africa to enhance financial inclusion while also addressing barriers to SME funding. Through a Technical Assistance component, this Program will strengthen the beneficiary FIs’ ability to serve SMEs.”
He noted that providers of term finance and other non-financial services, Development Finance Institutions (DFIs) have a crucial role to play in helping to alleviate the challenges faced by MSMEs in Africa. At the African Development Bank, for instance, we have prioritized support to MSMEs in our interventions across the High 5 strategic priorities.
On Venture Capital, he said currently, the Bank is implementing 3 three flagship programs to support the venture capital industry in Africa.
Dr. Adesina stated that to boost Africa Program, a Euro 170 million facility being implemented in partnership with the European Commission and European Investment Bank, seeks to promote entrepreneurship and innovation across Africa.
He explained that the program adopts an integrated approach combining seed funding, Technical Assistance and an Entrepreneurship and Innovation Lab (an interactive dashboard) to support venture segment, including start-ups and the entrepreneurship support ecosystems. It targets innovative high growth and technology driven intermediaries such as VC funds, angel investors, business enterprise incubators/ accelerators that invest in startups and early stage companies with high potential to grow and create jobs.
“Social Impact Investment Program for Africa (SIIPA): This Euro 50 million Program seeks to support social entrepreneurs to provide solutions for the local communities, often related to better -and affordable- access to finance, health, education, basic (soft) infrastructure (water & sanitation, internet, etc.), and markets. SIIPA supports social impact funds and provides Technical Assistance to Funds and entrepreneurs, the majority of target beneficiaries being MSMEs” he said.