The newly licensed Development Bank of Nigeria will finance 20,000 micro, small and medium enterprises in the first year of its operation.
It’s Managing Director, Mr Tony Okpanachi, said this on Friday during a media briefing where the management team of the bank was formally introduced by the Minister of Finance, Mrs Kemi Adeosun.
He said that the bank would be taking off with a total of 1.3 billion dollars, adding that this would be used to provide wholesale long-term funding to small businesses.
Okpanachi said the long-term funding would be provided through microfinance banks , commercial banks and other financial institutions for on-lending to MSMEs.
He said that this would enable the sector to create jobs and contribute significantly to economic growth.
Okpanachi said part of the strategies of the bank was to de-risk the sector by making sure that loans were provided at a longer period of 10 years with a moratorium that would enable the loans to be repaid within 12 years.
He said the loans would be given at a competitive rate, adding that this would be used to promote the development of the sector.
“DBN is a new dawn for MSMEs because we will provide small businesses with funds and this will create the needed impact on the economy.
“We will create a sustainable finding model and also ensure financial inclusion through access to funding.
“We are also looking at more female participation and about 20,000 SMEs will be funded in the first year of our operation,” he said.
Okpanachi said that the bank would not be dealing directly with individuals, but rather through their conventional bankers like microfinance and commercial banks.
Adeosun said that the operations of the bank would be devoid of political interference.
She said that unlike past, where operations of enterprises set up for the purpose of creating wealth were determined by political considerations, adequate measures had been put in place to check the trend.
She said the main reason why most MFBs had high interest rates was because they got short-term funds to finance small businesses, adding that with the creation of the DBN such would be reversed.
Adeosun said that the DBN would be unique because it would not focus on any sector like agriculture, manufacturing, oil and gas, but rather open to all MSMES, whether tailoring, trading, hair dressing and so on.
It will be recalled that the DBN was conceived in 2014, but its take-off had been fraught with delays.
The President Muhammadu Buhari administration inherited the project with a determination to resolve all outstanding issues and set a target of 2017 for its take-off.
The Central Bank of Nigeria on Tuesday approved the grant of a Wholesale Development Finance Institution Licence with national authorisation to DBN. - The Authority