The Central Bank has released license for the Development Bank of Nigeria to commence operations. The bank was established to support small-scale businesses, with loans of varying lengths at lower interest rates than currently available as the country contends with its first recession in 25 years.
According to the Minister of Finance, Mrs Kemi Adeosun, the DBN which is billed to kick off operations is being positioned to galvanise the Micro Small Medium Enterprises (MSME) for the overall development of the nation’s economy. The bank was conceived in 2014 by the administration of former President Goodluck Jonathan.
According to a statement by the director of Information in the ministry, Alh. Salisu Na’Inna, the approval was conveyed in a letter addressed to the Managing Director/Chief Executive Officer of DBN, dated March 28, 2017.
The letter was signed by the deputy governor of the CBN in charge of Financial System Stability and the approval was subject to meeting the minimum capital requirement of N100 billion and the reconstitution of the Board of the Bank as well as reviewing its organogram.
Based on the licence of operation, the bank will now have access to N396.5 billion or $1.3bn that was jointly provided by the World Bank, German Development Bank, African Development Bank (AfDB) and the Agence Française de Development (French Development Agency).
Adeosun said the 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).
She said as a wholesale bank, the DBN will lend wholesale to Microfinance Banks which will lend medium to long-term loans to MSMEs.