The Central bank of Nigeria has approved the grant of a Wholesale
Development Finance Institution Licence with national authorization to
the Development Bank of Nigeria (DBN) Plc, the Minister of Finance,
Mrs. Kemi Adeosun has confirmed.
The approval was conveyed in a letter addressed to the Managing
Director/Chief Executive of Officer of DBN dated March 28, 2017. The
letter was signed by the Deputy Governor of the CBN in charge of
Financial System Stability. The approval was subject to meeting the
minimum capital requirement of N100 billion and the reconstitution of
the Board of the Bank and reviewing its organogram.
A statement signed by SALISU NA’INNA DAMBATA director of Information
in the Federal Ministry of Finance The DBN, was conceived in2014
however, its take-off had been fraught with delays. The President
Muhammadu Buhari led administration inherited the project with a
determination to resolve all outstanding issues and set a target of
2017 for its take-off.
It could be recalled that the Minister of Finance said that the DBN
will have access to US$1.3bn (N396.5 billion) which has been jointly
provided by the World Bank (WB), KfW (German Development Bank), the
African Development Bank (AfDB) and the Agence Française de
Development (French Development Agency). The Bank is also finalising
agreements with the European Investment Bank (EIB).
She also stated that 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).
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.