Fidelity Bank Plc has disbursed about N9 billion to Small and Medium Enterprises (SMEs) in the country. The fund disbursed, according to the bank’s Divisional Head, SME Banking, Osaigbovo Omorogbe, is part of the N29 billion the Development Bank of Nigeria (DBN) advanced to it for SMEs development.
While disclosing the disbursement, Omorogbe said the lender released the DBN funding in a bid to bridge the gap for SMEs funding needs in the country.
He said, “We know that venture capital, and private equity firms will provide them with long term funds and more stable funds which is why we are putting this SME funding connect initiative together.”
Omorogbe also made known that Fidelity Bank is working in collaboration with Development Financial Institutions (DFIs) like BOI, Infrastructural Bank, amongst other financial institutions, to create adequate funding for the SMEs in order to drive the country’s economy.
Prior to this development, Fidelity Bank signed a financing pact with the African Development Bank (AfDB) to fund/promote the growth of SMEs in the country.
Why this matters: The role of SMEs in enhancing economic growth and development has, over time, been widely acknowledged globally. Economic wealth all over the world is created through enterprises and the expansion of their output.
SMEs contribute to the economy by creating value through the production of goods and services, thus enhancing the Gross Domestic Product. They also generate employment by creating much-needed jobs in the economy, as well as expanding the export sector, largely through linkages with large firms that produce for the foreign sector.
Lack of adequate funding has been one of the major challenges facing Nigerian SMEs. For a long time, entrepreneurs have lamented the lack of adequate provision of credit facilities. It is, therefore, a good thing that something is finally being done about the situation.