The Development Bank of Nigeria (DBN) is ramping up its operational roll out and activities to deliver on its mandate to provide credit to qualified micro, small and medium enterprises (MSMEs) on a structured and sustainable basis.
According to DBN’s Managing Director Tony Okpanachi, the bank is on course to meet its target to provide N5billion to 20,000 MSMEs in its first full year of operation. The DBN boss said that lending started in November 2017 with loans to 3 of the largest Microfinance Banks in Nigeria.
However, the development institution says it will do its job with a strict eye on standards and that only entrepreneurs who meet the necessary requirements will have access to its loans.
Speaking on DBN’s current priorities within the context of the institution’s long-term mandate, Okpanachi stated that “DBN management is taking this phenomenal responsibility very seriously indeed and we are determined to ensure that serious entrepreneurs get the support they need to grow so that the positive impact is felt in their businesses and the economy as a whole.”
On repayment terms for DBN loans, Okpanachi stated that the institution will “provide funds for up to 10 years in terms of actual repayment period but when necessary we also provide a moratorium of up to 18 months.”
Commenting further, Okpanachi emphasized “DBN loan cuts across all sectors of the economy. Our mandate and operations seek to achieve the Nigerian Sustainable Banking Principles (NSBP) of the Central Bank of Nigeria (CBN), where financial inclusion ranks high, as well as the United Nations Sustainable Development Goals and is in line with the Economic Recovery and Growth Plan of the Federal Government of Nigeria.’’
Another notable step taken by the bank was the recent shortlisting of seven banks for loan disbursement to entrepreneurs across the country who meet DBN requirements. The initial banks whose numbers are expected to be boosted by other banks currently being processed include commercial banks – Wema Bank, Ecobank, Sterling Bank, Diamond Bank, Fidelity Bank UBA and FCMB. The others are microfinance banks: Microcred, Infinity, NPF, Bosak, Fortis, Hasal, AB, Seedvest, Parallex, Addosser and La Fayette.
Also significant is the recent equity investment in DBN by the European Investment Bank (EIB) and the African Development Bank (AfDB) to with the tune of $70m which is directed to strengthen lending for business and agriculture investment in the country.
In another boost to its institutional credentials, DBN has also obtained the approval of the Central Bank of Nigeria to set up a credit guarantee scheme through a wholly owned subsidiary.
It would be recalled that Nigeria has over 37 million MSMEs contributing to over 50 percent of Nigeria’s GDP. However, less than 5 percent of these businesses have access to credit in the financial system.
The development finance institution was established to contribute to alleviating financing constraints that hamper the growth of domestic production and commerce by providing targeted wholesale funding to fill identified enterprise financing gaps in the MSME segment.
The bank functions as a wholesale finance institution and provides long term financing to financial institutions for on lending to qualified small business.
