The Development Bank of Nigeria (DBN) is repositioning its approach to financing micro, small and medium-sized enterprises (MSMEs), moving beyond the provision of credit to a broader model that combines funding, capacity building, technical assistance, technology adoption and market linkages to help businesses expand and create more jobs.
The move reflects a growing recognition that access to finance alone is insufficient to unlock the potential of small businesses, particularly in developing economies such as Nigeria, where MSMEs account for a significant share of economic activity but continue to face barriers to finance, infrastructure, skills and market access.
Tony Okpanachi, managing director and chief executive officer of DBN, told BusinessDay on the sidelines of the IMF/World Bank Annual Meetings in Bangkok, Thailand, that the bank was strengthening its interventions to ensure that more businesses could access not only financing but also the support needed to grow, improve productivity and become sustainable.
As part of this effort, DBN is pursuing additional funding commitments and global partnerships while expanding its capacity-building programmes and technical assistance to participating financial institutions and MSMEs. The objective is to build stronger enterprises capable of generating sustainable employment and contributing more meaningfully to economic growth.
DBN operates a wholesale lending model, providing funding through participating financial institutions, including commercial, non-interest, merchant and microfinance banks, rather than lending directly to most MSMEs. It also provides partial credit guarantees through its subsidiary, Impact Credit Guarantee Limited, to encourage lenders to extend credit to viable businesses that may struggle to meet conventional collateral requirements.
As at December 2025, the bank had disbursed N1.4 trillion to MSMEs through 84 participating financial institutions, facilitating about 1.6 million jobs. Its current five-year strategy targets more than two million businesses, with particular attention to women- and youth-led enterprises and businesses in underserved states.
Learning from global MSME models
DBN is drawing lessons from other development finance institutions to identify proven models for improving access to finance and supporting the growth of Nigerian MSMEs.
At the Bangkok meetings, job creation featured prominently in discussions on economic growth, particularly in developing economies where MSMEs are expected to play a major role in expanding employment and economic participation.
For DBN, those discussions provided an opportunity to examine how other countries and development finance institutions are addressing similar challenges, including the need to expand access to long-term funding, improve enterprise capacity and build stronger partnerships across the private sector.
“The message is clear: MSMEs are major drivers of job creation in any economy, including Nigeria. Therefore, whatever we do to support these businesses, create an enabling environment for them and improve their access to finance will directly or indirectly create employment opportunities.” Okpanachi told BusinessDay.
On the sidelines, DBN held bilateral engagements with Germany’s KfW and the African Development Bank (AfDB), an existing shareholder, while exploring deeper ties with Italy’s Cassa Depositi e Prestiti (CDP). It also met Indian companies and development finance institutions to attract resources, technical expertise and identify practices adaptable to Nigeria.
Thailand and India offered useful MSME models, with Okpanachi highlighting the visibility and economic contribution of small businesses in Thailand and India’s thriving enterprise sector as learning opportunities for strengthening support to Nigerian businesses.
DBN is also keen to learn from the Development Bank of Southern Africa’s green finance experience to expand its existing interventions.
“We are already doing this, but we want to scale. We have engaged with them to understand their achievements and identify the practices that have worked well,” Okpanachi said, stressing that foreign models must be adapted to Nigeria’s economic conditions and business needs.
Beyond lending to building businesses
While additional funding commitments expand lending through its partner financial institutions, DBN’s next phase goes beyond credit delivery to strengthening lenders’ capacity, building entrepreneurs’ business skills and improving access to finance.
Okpanachi said the bank’s four priorities include expanding financing through participating institutions, scaling up capacity-building, strengthening technical assistance to lenders and improving collaboration across the business ecosystem.
The focus on financial institutions reflects their role as direct lenders to MSMEs. Strengthening understanding of borrowers’ business models, risks, financing needs and growth prospects, he said, improves lending decisions and helps viable enterprises access formal credit.
DBN is also expanding entrepreneur training and business development support to improve financial management, business plans and credit readiness.
Its partial credit guarantee scheme complements these efforts by sharing lending risks with partner institutions and encouraging credit to viable businesses that lack conventional collateral.
The wider ecosystem is equally important. MSME development depends not only on access to finance but also on the availability of business networks, technical expertise, market opportunities and partnerships that help enterprises compete and expand.
Okpanachi said DBN is therefore seeking to involve stakeholders beyond the financial system in its interventions. “It is not just about the financial system; it is about bringing other players into the ecosystem and fostering collaboration that can deliver greater impact,” he said.
The bank’s newly launched DBN Action for Women in Nigeria (DAWN) programme illustrates this approach, as the initiative combines financing with credit guarantees, technical assistance, targeted grants and market linkages to address barriers confronting women-owned businesses.
Okpanachi explained that the broader objective is to measure the effectiveness of DBN’s interventions by the results they produce for businesses and the economy, rather than focusing mainly on the amount of money disbursed.
“As enterprises expand, they employ more people, strengthen supply chains, increase production, contribute to government revenue through taxes, and the economy is strengthened.”
AI emerges as next frontier for MSME growth
Technology, particularly artificial intelligence (AI), is emerging as another important part of DBN’s strategy to improve its operations and help small businesses become more productive and competitive.
AI featured prominently in discussions at the Bangkok meetings, where participants examined its potential to transform business operations, improve productivity and create new economic opportunities. Okpanachi said DBN had already adopted the technology in aspects of its operations, including information gathering, data analysis and engagement with financial institutions and MSMEs.
The bank uses analytical and predictive tools to help staff assess information, identify patterns and understand possible outcomes. These capabilities can support better decisions about the needs of businesses and the interventions required to address them.
“Our view is that AI will not displace jobs but will serve as an enabler, making work easier and improving efficiency,” Okpanachi said.
For DBN, the technology also offers a way to improve how it understands the businesses it supports. By analysing information on MSME activities and performance, the bank can develop interventions that respond more closely to actual business needs instead of designing programmes without sufficient evidence, Okpanachi explained.
The bank is also encouraging MSMEs to adopt AI in their own operations to access market intelligence beyond their immediate environments, identify new opportunities, anticipate the possible effects of business decisions and improve product development and resource allocation.
Okpanachi further explained that this approach is particularly useful for smaller enterprises that lack the resources to maintain large research, marketing or analytical teams. According to him, access to appropriate digital tools can help them understand customers, assess competition and make more informed decisions about expansion.
Meanwhile, the Nigeria investors’ forum, also held on the sidelines of the Bangkok meetings, provided a platform to showcase investment opportunities across sectors, while the deal room facilitated direct engagement between international investors and Nigerian project promoters.
Okpanachi said such engagements were critical to linking Nigeria’s reform efforts with bankable investment opportunities and connecting MSMEs to wider sectoral value chains, potentially expanding their access to investment and new markets.
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Onyinye Nwachukwu is the Abuja Bureau Chief of BusinessDay, overseeing coverage across Abuja and Northern Nigeria. With more than two decades of experience in economic and financial journalism, she reports on business, policy, and market trends, linking local developments to the global economy. A fellow of the International Monetary Fund (IMF) and recipient of the P. Vishwanathan Memorial Award for Excellence in Financial Journalism, she is known for her insightful storytelling and interviews with senior policymakers, diplomats, and business leaders. Well traveled and globally minded, Onyinye brings depth and international perspective to her reporting.
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