DBN Engages Nine Banks to Fund SMEs

Development Bank of Nigeria (DBN) has engaged nine conventional Deposit Money Banks (DMBs) to access its credit lines for onward transmission to their Small and Medium Enterprises (SMEs) customers.

DBN Managing Director/ Chief Executive Mr. Tony Okpanachi said at the weekend that another batch of DMBs would be picked in the second phase.

Diamond Bank, Sterling Bank, Fidelity bank, Eco Bank and Wema Bank, are the commercial banks in first batch. “For the micro-finance banks, we have Micro credit, Infinity and Busack.

We are yet to disburse to Forts which ought to be among them, I know they are working towards meeting the conditions that will enable them to access the funds,” Okpanachi said.

The DBN boss added: “We started operations with about three microfinance banks. We made available N5 billion to finance SMEs through their banks. But the money came down to N4.9 billion, which is available to them to draw down. But beyond that, we have started welcoming commercial banks. We are currently making credit lines available to them to draw down. Nine banks are on our list, mainly commercial banks.”

He said DBN “is doing a lot in the area of de- risking and capacity building for Microfinance finance banks whose duty is to lend directly to the SMEs.”

He said Private sector businesses were critical to the development of the Nigerian economy given “their huge potential for employment generation and output diversification.”

Okapanachi said DBN was targeting agriculture with its huge potentials by collaborating with the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) to de- risk the sector and provide guarantee for the SMEs to access credit facilities.

Regarding the ability of the DBN to meet the demands for credit by SMEs through their banks, Okpanachi said: “investors of DBN recently took a decision to invest additional $70 million in to the bank

The European Investment Bank and African Development Bank (AfDB) , part owners of DBN, agreed to invest $20-million and US $50-million in Nigeria’s Development Bank of Nigeria (DBN) to strengthen its business and agriculture lending capacity.”

He assured both investors and other stakeholders that “the Development Bank of Nigeria will overcome the funding gap in the micro-small and medium scale enterprises space and help businesses unlock opportunities across Nigeria.

DBN’s ambition is strengthened by the financial and technical support of international partners, including the European Investment Bank and African Development Bank. The new institution builds on international experience and uses a business model that has demonstrated proven success to enhance private-sector investment across Africa and around the world where other financing options are inad Other international financial institutions supporting DBN include the World Bank, Germany’s KfW and the French Agency française de development (AFD) with federal government of Nigeria having the highest stake.

 

Source: The nation

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