• Saturday, June 22, 2024
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DFIs must adopt innovation to drive economic development – BoI MD

BOI to support Rivers industrial hubs, SMEs

Development Finance Institutions (DFIs) must adopt innovation and collaborative strategies to drive developmental impact on the economy in line with global standards and recent developments, Olukayode Pitan, managing director/CEO, Bank of Industry (BoI), has said.

He spoke at the 3rd annual Association of Nigeria Development Finance Institution (ANDFI) executive meeting and general assembly, themed ‘Innovative financing for developmental impact’ held in Abuja on Thursday.

Pitan, who is also the chairman, ANDFI, said as Nigeria strives to achieve sustainable development goals and address global challenges amid its growing population, traditional financing models have become inadequate which necessitates the need for innovative and collaborative efforts to bridge the financing gap and drive the transformative changes.

“Though innovative financing presents a veritable tool for DFIs to raise additional resources for development, specific market failures and institutional barriers prevent private investment from flowing to developing countries; these issues have also influenced the success and growth of DFIs and private sector players in the Nigerian economy,” he said.

Some of the challenges highlighted include asset deterioration, weak corporate governance and risk management frameworks, among other issues.

The BoI boss said DFIs play a significant role in ensuring sustainable economic and social development and must continuously collaborate with each other, leveraging diverse expertise, resources, and networks to unlock transformative projects.

“To deepen our activities in innovative financing, we must foster mutual support and encourage cooperation among our members. This can be achieved through the exchange of technical expertise between our member DFIs and similar organisations globally. Likewise, we must prioritise the professional advancement of our members while leveraging on the knowledge from best-in-class economies that have adopted innovative financing initiatives,” he said.

He added that collaborations can also be extended to the international space, noting that developed countries can support developing countries by providing resources, technology transfer, and capacity building.

Similarly in his address, Banji Fehintola, head of treasury & financial institutions at Africa Finance Corporation (AFC), highlighted key areas DFIs must focus on going forward to make an impact.

“As DFIs we need to start thinking about diversifying our product offering leveraging innovation to craft more solutions to problems; We should also leverage our partnerships with other DFIs, commercial banks and global capital market in order to diversify our funding,” he said

Fehintola added that DFIs must also focus on tapping new markets in order to improve its cost of funding such as investing in frameworks for sustainability.

He urged DFIs to optimise developments around sustainability, as well as Environmental, Social, and Corporate Governance (ESG), noting that the industry which is currently valued at $3.6 trillion, will grow to $23 by 2031.

“We must think of different types of equity instruments that we can introduce into our capital structure in order to attract different types of lenders that will support our capital base,” he said.