The Development Bank of Nigeria (DBN) will serve as a wholesale financial bank to other banking sectors in the country most especially the Microfinance Banks to lend to Nigerians.
The operational license for the Development Bank of Nigeria (DBN) aims to lend on medium and long-term loans to Micro, Small and Medium Enterprises (MSMEs).
A letter addressed to the Managing Director/Chief Executive Officer of the Development Bank of Nigeria (DBN), was signed by the Deputy Governor, Financial System Stability of the Central Bank of Nigeria (CBN), Dr. Okwu Nnanna and Minister of Finance, Mrs. Kemi Adeosun, confirmed the approval of the bank adding that the approval was subject to meeting the minimum capital requirement of N100 billion as well as the reconstitution of the board of the bank and reviewing its organogram.
An highlight was disclosed on how the Development Bank of Nigeria emanated, that the Bank was conceived sometimes in 2014 but its take off was delayed by fears that it would lead to the scrapping of the Bank of Industry (BOI) popularly associated with as the MSMEs bank due to its loan facilities.
It was further disclosed that the Development Bank of Nigeria (DBN) would have access to about N396.5 billion, which has been jointly provided by the World Bank, German Development Bank, African Development Bank and the French Development Agency.
Ministry of Finance had in an interview posited an assurance to the public that the operations of the Development Bank of Nigeria (DBN) would not eliminate the other existing development finance institutions in the country.
That “The operations of the Development Bank of Nigeria Development Bank of Nigeria (DBN) is clearly distinct from other development banks as it is focused on supporting small businesses defined by size and not by sectors.
That “The Development Bank of Nigeria (DBN), will provide loans to all sectors of the economy including, manufacturing, services and other industries not currently served by existing development banks thereby filling an important gap in the provision of finance to Micro, Small and Medium Enterprises.” MSMEs contribute about 48.47 percent to the Gross Domestic Products (GDP) of Nigeria but have access to only about five percent of lending from Deposit Money Banks (DMBs).
At the conclusion of the briefing, it was disclosed that the Federal Government of Nigeria “expects that the influx of additional capital from the Development Bank of Nigeria (DBN) will lower borrowing rates and the longer tenure of the loans, will provide the required flexibility in the management of cash flows, giving businesses the opportunity to make capital improvements, and acquire equipment or supplies.”
The Ministry urges the general public to utilized the opportunity the Development Bank of Nigeria (DBN) presented particularly the medium and long-term loans to Micro, Small and Medium Enterprises (MSMEs).