By Florence Israel, Abuja.
The Development Bank of Nigeria (DBN) Plc has been given approval by the Central Bank of Nigeria (CBN), for the grant of a Wholesale Development Finance Institution licence with a national authorisation.
According to the Finance Minister, Mrs. Kemi Adeosun, the approval was conveyed by a letter dated March 28, 2017 and signed by the CBN Deputy Governor in charge of the Financial System Stability and addressed to the Managing Director/Chief Executive of the DBN.
Mrs. Adeosun had earlier noted that the DBN would be given access to US$1.3 billion (N396.5 billion) jointly provided by the World Bank, German Development Bank (KFW), the African Development Bank (AFDB) and the French Development Agency (Agence Francaise de Development).
While the DBN was also on the verge of concluding agreements with the European Investment Bank (EIB), the Finance Minister also made it known that the bank would be a key loan provider to all sectors of the economy such as manufacturing, services and other industries that were not benefiting from other existing development banks.
This is expected to bridge the gap in finance provision to the Micro, Small and Medium Enterprises (MSMEs), which contributes about 48.47percent to the GDP of the nation but have access to only about five percent of lending from Deposit Money Banks (DMBs).
It is noteworthy that the DBN which was conceived in 2014 is one of the inherited projects of the President Buhari’s government which set a target of 2017 for its take-off.
The Federal Government has the expectations that the influx of additional capital from the DBN will not only lower borrowing rates and reduce tenure of loans, but that it will also provide the required flexibility in the management of cash flows that will help businesses to improve their capitals, equipments or supplies.
