Development Bank disburses N5bn to 20,000 MSMEs

DEVELOPMENT Bank of Nigeria (DBN) on Monday disbursed its first set of loans through three microfinance banks to 20,000 micro, small and medium enterprises (MSMEs) across the country.

DBN was licensed by Central Bank of Nigeria (CBN) in March this year as a wholesale development finance institution that will lend to banks for onward lending to MSMEs.

At the ceremony, Managing Director of DBN Mr Tony Okpanachi said “statistics show that there are over 37 million MSMEs in Nigeria but regardless of the number, many of these businesses still struggle with access to adequate financing.

“With an increasing educated demography graduating from tertiary institutions, coming home to meet limited vacancies in the job market, and a corresponding number from abroad returning to Nigeria to create values, solve problems and start businesses, the time or DBN is now.”

According to him, existing financing options are inadequate to address the demands of the segment and it is a well-known fact that no one financial institution is able to solve the funding needs so the more, the merrier.

“DBN will, therefore, make sure that in addition to what other DFIs are doing, it is able to provide depth for funding of that segment. It is against this context that DBN loans will provide sustainable financing Nigerians in the MSMEs segment.

“Unlike other DFIs that are sector specific, DBN loans cuts across all sectors.

“DBN loan repayment tenure is flexible- up to 10 years with a moratorium period of up to 18 months and the pricing is pragmatic and reference to market rates. Today, we are proud to announce our first three participating financial institutions all of whom are national microfinance institutions with coverage over the whole nation.”

The three microfinance institutions include Fortis Microfinance Bank, LAPO Microfinance Bank and NPF Microfinance Bank.

The DBN boss explained that in future, more participatory financial institutions including commercial banks, other development finance institutions (DFIs) and others will sign on to access DBN loans, which will be available to MSMEs which are already customers across the nation.

He explained that the loan prices are benchmarked against current microeconomic rates like treasury bills and bond rates depending on whether they are long or short-tenured.