Interventions by the African Development Bank (AfDB) in various Small and Medium Enterprise (SMEs) support programmes resulted to the creation of more than 440,000 jobs in Nigeria, the president of AfDB, Akinwunmi Adesina, said.
Adesina who disclosed this at the African Small and Medium Enterprise (SMEs) Immersion Fund Roundtable in Lagos said 60 percent of beneficiaries from these support programmes were women and youth.
The roundtable with the theme, “Enhancing the Capabilities of MSMES in Africa: The Role of Direct Foreign Investments (DFIs)’’ was organised by Access Bank PLC.
Adesina who was represented by, Director-General of the Nigeria Country Department of AfDB, Lamin Barrow, said the bank supported more than 20,500 micro, small and medium enterprises (MSMEs), with about eight LOCs targeting SMEs and valued at $1.1 billion.
The bank, he said also inaugurated the Affirmative Finance Action for Women in Africa (AFAWA), a flagship initiative to close the $42 billion access to finance gap for women-led and owned SMEs.
“Through AFAWA, the bank will facilitate up to $5billion in credit access to women SMEs by 2026. This will be achieved by enhancing access to financial services by leveraging our LOCs, trade finance and equity participations.
“This is to ensure that a percentage of these investments are targeting wowomen-empowered SMEs. To date, more than 800 million dollars in investments has been approved for on-lending to 3,000 women SMEs in 23 African countries, including Nigeria,’’ he said
Adesina said the initiatives were part of the bank’s effort to support African countries in modernizing their business enabling environments for MSMEs to thrive.
Access to finances by MSMEs, he said, would be done through equity participation and debt financing for regional development banks and specialized financial institutions.
In line with the Private Sector Development Strategy (2021-2025) Pillar on Enterprise Development, he said, the AfDB lines of credit interventions are increasing.
“They are more targeted to support the development of regional value chains and clusters with strong linkages to MSMEs through off-taker and others to de-risk the eco-system,’’ he said.
Adesina said AfDB’s financial sector development strategy was focused on some pillars, adding that one of the pillars was expanding access to mainly MSMEs operating in the informal sector and fostering development of domestic capital markets and financial institutions.
The AfDB president said the bank’s support to enhance the capacity of SMSEs and financial drive inclusion covers thematic areas
like access to credit.
“This is provided through an array of instruments, including loans, guarantees and equity participation in Financial Intermediaries (FIs), including banks, SMEs-focused private equity and venture capital funds among others.
“Our Africa SMEs programme will channel $150 million funding to SMEs across Africa to enhance financial inclusion while also addressing barriers to SMEs funding.”
Besides ensuring access to finance, Adesina said the bank was implementing three flagship programmes to support the venture capital industry in Africa.
He said the Boost Africa Programme, a 170 million Euro facility, was being implemented in partnership with the European Commission and European Investment Bank.
“It seeks to promote entrepreneurship and innovation across Africa and adopts an integrated approach combining seed funding, technical assistance and an entrepreneurship and innovation lab.
Also, he said there was the Social Impact Investment Programme for Africa (SIIPA), a 50 million Euro programme to support social entrepreneurs to provide solutions for the local communities, often related to better and affordable access to finance, health, and education, among others.
Furthermore, Adesina said the AfDB also has the Investment in Digital and Creative Enterprises Programme (i-DICE), a $618 million flagship initiative co-financed by Agence Française de Développement (AFD) and the Islamic Development Bank (IsDB) to promote entrepreneurship and innovation in the digital and creative industries.
The i-DICE programme, he said, was expected to stimulate investments in 226 technology and creative start-ups.
The programme, he said, would provide non-financial services to 450 digital technology and SMEs in order to create 6.1 million direct and indirect jobs.
Another strategy deployed by the bank in supporting MSMEs, according to him, was digital financial inclusion, through which it was expected that 400 million dollars in grants and loans would be deployed by 2030 to ensure that 332 million people had access to finance.
On creating enabling environment, Adesina said the bank was working with governments and other development partners to identify policy reforms needed to boost MSMEs.
On impact of the roundtable organised by Access Bank PLC, he said it would help provide funding, risk sharing and non-financial services to MSMEs.
He said this would be done through proposed one billion dollars SMEs Immersion Fund for Africa.
Adesina said the private sector landscape in Africa was dominated by MSMEs, which constituted the backbone of African economies.
Through MSMEs investments, he said innovation and trading activities, MSMEs fostered inclusive growth and job creation, pointing out that in Nigeria, for instance, MSMEs employed about 77 percent of the workforce.
“This workforce is dominated by women who face greater challenges in accessing affordable finance and non-financial services. This is due to gender biases in property rights that limit their ability to collateralise their loans,’’ he said.
On growth of MSMEs, he said the subsector had been constrained by many factors.
Adesina said they were faced with poor access to affordable finance, perception of high default risk, information asymmetries and other challenges related to their informal nature.
He also said disruptions to global and regional supply chains and tightened financing conditions due to COVID-19 pandemic were responsible for challenges faced by MSMEs in Africa.
“As providers of term finance and other non-financial services, Development Finance Institutions (DFIs) have a crucial role to play,’’ he said.
He expressed AfDB’s commitment to engaging with Access Bank and other stakeholders in supporting the proposed SMEs Immersion Fund for Africa.
According to him, the bank will continue to deploy its array of instruments, and leverage its initiatives and strategic partnerships to support the development of MSMEs in Africa. (NAN)