My Speech at the public hearing organised by the Senate committee on Banking, Insurance And other financial institutions on the Bill for the Establishment of the National Development Bank of Nigeria.
It is my pleasure to welcome you all to today’s public hearing organized by the Senate committee on Banking, Insurance and other financial institutions on The National Development Bank (Establishment bill).
The 8th Senate has remained unflinchingly committed to using substantial legislative time and energy towards economic reforms with major focus on reducing the cost of doing business in Nigeria as well as boosting enterprise development.
The National Development Bank of Nigeria (establishment bill) is one of those bills we have identified as crucial in expanding the access to finance opportunity for our people and promoting long-term borrowing that is less fragile. This bill has also been identified by the private sector as an integral unit in the institutional restructuring in the banking sector that will enable better SME and financing.
This public hearing is therefore another avenue to seek intellectual and professional inputs from experts like you in the financial sector to query the framing of the bill. We will be very glad to get your honest opinions on such issues as the values to be derived from the merging proposed under the bill especially affecting other SME financing institutions and the advantages or otherwise of seeking a one-stop-shop special purpose SME financing entity with capacity.
After our annual recess in September, as part of our antidote for revamping the economy the Senate prioritized certain legislative proposal including the National Development Bank establishment bill for consideration because of the benefits of mobilizing domestic and international resources aimed at addressing development financial needs.
We have realized that overtime the existing development financial institutions established by government in the country have not been framed in such a manner as to act as an effective catalyst and financier of our young people’s innovation, enterprise and aspirations. This bill is aimed at addressing the limitations already observed and creating something more dynamic, more adaptive and robust in financial intermediation for development.
According to the Comprehensive Review of the Institutional, Regulatory, Legislative & Associated Instruments Affecting Businesses in Nigeria micro, small and medium-sized enterprises (MSMEs) represents 96% of Nigerian businesses and as such are crucial to the Nigerian economy. The review goes further to show the difficulties these businesses have in accessing funds from financial institutions with data sourced from a collaborative survey conducted by the Small and Medium Enterprise Development Agency and the National Bureau of Statistics. The data showed that out of 80,312 Small and Medium Enterprises, only 13,031 (17%) listed their source of capital as a loan. In regards to micro enterprises only 3% were said to have listed their source of capital as a loan and these loans are more responsible for their inability to break even than most other challenges. These facts point to struggles faced by business owners in Nigeria and sets the tone for today’s public hearing.
Let me be clear, ours is a simple vision; the see our economy exit recession through critical legislative interventions that can help unlock capital and energize our people’s enterprise. We want to to see the cost of getting loans reduce significantly and access to finance improves remarkably. It is hoped that by the time this bill is passed into law and signed by the president, we will have an institution that inspires confidence in our young ones to pursue and grow small businesses in every community and locality. This bill is only the first in the series of interventions we plan that would help refocus the banking sector in a manner that gives hope and inspires investor confidence in the Nigerian economy.
This Senate, therefore recognize the need to strengthen and develop the domestic financial sector by encouraging the orderly development of capital markets through sound banking systems and other institutional arrangements aimed at addressing development financing needs. A National Development bank can be an effective instrument for small entrepreneurs and small and medium size enterprise to fully participate in the economy and fulfill the expectation of a more virile and diversified Nigerian economy.
It is never too late to begin a good idea even with mounting opposition. We have a good opportunity to develop an efficient institutional framework for the establishment of a National Development Bank. But we must do it taking all parties and opinions on board so that our final outcome meets the test of time. It is my belief that at the end of this public hearing we must have moved a step further in this regard.
Thank you very much for listening