The Development Bank of Nigeria (DBN) has secured its license from the Central Bank of Nigeria (CBN).
This was according to the Minister of Finance, Mrs. Kemi Adeosun, who made the disclosure in a statement by the ministry’s Director of Information, Salisu Na’inna Dambatta.
Adeosun disclosed that approval was conveyed in a letter signed by CBN’s Deputy Governor in charge of Financial System Stability and addressed to the Managing Director/Chief Executive of Officer of DBN on the 28th of March 2017.
The DBN is a Wholesale Development Finance Institution owned by the Ministry of Finance.
The Minister said the approval is a sequel to “meeting the minimum capital requirement of N100 billion and the reconstitution of the Board of the Bank and reviewing its organogram.”
According to Adeosun, the World Bank (WB), KfW (German Development Bank), the African Development Bank (AfDB) and the Agence Française de Development (French Development Agency) had jointly provided the DBN the sum of US$1.3bn (N396.5 billion) to aid the bank takeoff operations.
With this, “the DBN will be able to provide loans to all sectors of the economy including, manufacturing, services and other industries not currently served by existing development banks,” the minister said.
Adeosun Said the DBN will therefore “fill an important gap in the provision of finance to Micro, Small and Medium Enterprises (MSMEs).
“As a wholesale bank, the DBN will lend wholesale to Microfinance Banks which will on-lend medium to long-term loans to MSMEs. The MSMEs contribute about 48.47 percent to the Gross Domestic Products (GDP) of Nigeria but have access to only about 5 percent of lending from Deposit Money Banks (DMBs).
“The Federal Government expects that the influx of additional capital from the 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 minister said.