June 07, (THEWILL) — The Development Bank of Nigeria (DBN) Plc is strengthening its commitment to the growth of micro, small, and medium enterprises (MSMEs) – a sector that accounts for more than 90 percent of employment through the over 40 million businesses nationwide.
Given that the Monetary Policy Rate stands at 26.5 percent and effective bank lending rates for the real sector reach as high as 38 percent, securing financing for MSMEs through conventional banking channels has proven to be a significant challenge. This situation underscores the critical role that the intervention of DBN has played in sustaining the MSME sector during an increasingly difficult environment.
This highlights the recent advancement regarding DBN’s allocation of over N1 trillion to more than one million MSMEs, contributing to the creation of over 1.6 million jobs since the bank’s inception in 2017.
During a media briefing held in Lagos on Wednesday, June 3, 2026, DBN Managing Director, Dr. Tony Okpanachi, stated that the development finance institution has achieved considerable progress in tackling the financing obstacles encountered by small enterprises, which continue to be a vital component of Nigeria’s economy.
As stated by Okpanachi, the bank has established a network comprising 84 participating institutions, which includes commercial banks, microfinance banks, and development finance institutions. This network allows the bank to extend its services to businesses nationwide.
The arrangement aligns with the goal of the wholesale financial institution founded in 2017, which aims to enhance financial access for MSMEs. The DBN also offers long-term funding, credit guarantees, and capacity-building assistance through its participating financial institutions.
“Our strategic intent is to achieve greater scale by expanding support for MSMEs and strengthening inclusive economic growth,” Okpanachi said.
In pursuit of this objective, the bank intends to mobilize N1.3 trillion in both debt and equity capital over the next five years to enhance access to finance and provide greater support for underserved sectors. As a result, DBN has introduced an ambitious five-year growth strategy designed to increase its developmental impact.
The bank aims for an outstanding loan portfolio of N1 trillion, plans to issue N500 billion in credit guarantees, and aspires to assist over two million MSMEs while promoting the creation of two million direct and indirect jobs.
In this context, the bank’s influence has been particularly significant among women and young entrepreneurs. Businesses owned by women constitute 77 percent of the beneficiaries, while enterprises led by youth account for 28 percent.
Additionally, the bank has disbursed N108 billion to more than 132,000 MSMEs located in conflict-affected and economically disadvantaged states, including Borno, Adamawa, Katsina, Yobe, and Zamfara. In the year 2025 alone, DBN has allocated over N358 billion to more than 289,000 MSMEs, further solidifying its position as a vital catalyst for enterprise growth and financial inclusion in Nigeria.
New tax regime
The DBN is anticipated to enhance its support to MSMEs as the implementation of the new tax laws will inevitably transform the operational framework of this sector. The new tax laws in Nigeria, which came into effect on January 1, 2026, provide substantial relief to low-income earners and small businesses, which is their primary feature.
These laws considerably alleviate the burdens on small businesses by increasing the turnover threshold for exemptions to N100 million and exempting them from Companies Income Tax (CIT), Capital Gains Tax (CGT), and the Development Levy. Nevertheless, MSMEs are not entirely shielded from the repercussions of the new tax regime.
For example, the requirement for a tax identity number (TIN) for all transactions, stringent digital compliance, the possibility of higher taxes for firms slightly exceeding the threshold (N100M+), and the exclusion of professional service firms from these exemptions indicate additional operational costs. Although the applicable tax rates are lower, the demands for formal record-keeping, monthly reporting, and adaptation to digital tax systems are considerable.
Companies offering professional consultancy services, regardless of their size or age, do not qualify under the “small company” definition, meaning they are taxed regardless of low turnover.
However, this does not protect the small business owner from the obstinate and unyielding multiple taxes imposed by local government authorities, which are frequently enforced in a harsh manner. Furthermore, MSMEs are not exempt from the compliance penalties outlined in the new tax regulations, which are severe.
These penalties include the failure to provide access for tax assessments or to adhere to regulations, potentially leading to substantial fines, including 10 percent of the tax owed. Companies with a turnover slightly exceeding N100 million may encounter considerable tax hikes (projected to be as high as 25 percent to 27.5 percent), which could deter growth beyond this limit.
Under the revised tax framework, DBN is anticipated to significantly enhance its support for MSMEs in Nigeria, concentrating on increased funding, digital transformation, and capacity development.
This initiative follows a record disbursement of over N1.1 trillion to more than 700,000 MSMEs by late 2025, with a particular emphasis on businesses led by women and youth.
Research indicates the following forecast for DBN’s support for small enterprises, which it plans to intensify in 2026:
Key financing & funding initiatives:
Among these initiatives is the World Bank FinCLUDE Project, under which DBN will execute a new project valued at $500 million ($400 million IBRD loan and $100 million IDA credit) that was approved in late 2025. This project aims to provide $1.89 billion in private capital to 250,000 MSMEs, which includes at least 150,000 businesses led by women and 100,000 agribusinesses.
Additionally, there is a long-term financing programme that offers loans with extended maturities, some of which may last up to 10 years, designed for participating financial institutions to facilitate long-term investments by MSMEs in equipment and factories.
Furthermore, there are partial credit guarantees: Through its subsidiary, Impact Credit Guarantee Limited (ICGL), DBN will persist in expanding guarantees to motivate commercial banks to lend to small businesses that are considered risky or underserved. DBN is also initiating targeted programmes in Northern Nigeria to enhance access to finance and improve business structures in these areas, with a specific focus on the North-West and North-East regions.
Capacity building & training (2026 Focus):
The wholesale financial institution is set to enhance the DBN Academy & BizAid programme, continuing its free online, self-paced learning platform, BizAid, which includes mandatory courses in accounting, sustainability, and marketing.
Additionally, there is a specialised training initiative that involves face-to-face sessions. Businesses that excel in the online training will be chosen for exclusive in-person training opportunities in cities such as Lagos and Abuja, where they may also qualify for grants.
The capacity building initiative will experience a significant shift towards digitalization: Training will focus extensively on AI, automation, and digital marketing to ensure that businesses stay relevant and competitive by 2026. Programs tailored to specific genders and age groups will be sustained to guarantee support and priority access to credit for women and youth-owned enterprises.
Strategic Partnerships: Collaboration with SMEDAN – DBN will collaborate closely with the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), which aims to formalize 1 million new businesses and provide a N12 billion funding increase in 2026.
Also, DBN continues to partner with over 70 commercial banks, microfinance banks, and financial technology (FinTech) firms to distribute funds through the Participating Financial Institutions (PFIs) framework.
In general, beneficiary businesses must be registered with the Corporate Affairs Commission (CAC), demonstrate growth potential, create jobs, and show social or economic impact. With the introduction of new tax regulations, small businesses face significant challenges as Nigeria prepares to expand its tax base, marking a new era for the informal sector.
At the last capacity building in Abuja in 2025, Dr Okpanachi expressed optimism about the resilience of small businesses: “Nigerian MSMEs, with their resilient, creative, and adaptive DNA, can rise stronger, provided we equip them with the right tools, access to finance, knowledge, and enabling policies. The destiny of Nigeria’s economy is intertwined with the success of its small businesses. When they thrive, we all thrive,” he said.
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
