The Development Bank of Nigeria (DBN) has been issued licence by the Central Bank of Nigeria to begin operations.
The bank was established to support small-scale businesses, with loans of varying lengths at lower interest rates than currently available in the country.
The Minister of Finance, Mrs Kemi Adeosun, noted that the DBN which was conceived in 2014 by the administration of former President Goodluck Jonathan is being positioned to galvanise the Micro Small Medium Enterprises (MSME) for the overall development of the nation’s economy.
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.
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 ministry of finance had doused tension that the operations of the DBN will result in the elimination of the Bank of Industry (BOI), Bank of Agriculture (BOA) or any other existing development bank.
Instead, it said DBN will help to have positive impact on the economy through employment generation, wealth creation and economic growth as well as complement other development banks.
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.
Meanwhile, Japanese companies have been invited to take advantage of the various business opportunities that will be presented by the Special Economic Zones being established in various parts of the country.
In a release signed by media adviser to the minister of budget, Mr. Akpandem James, Senator Udoma Udo Udoma told the Japanese Ambassador to Nigeria, Mr Sadanobu Kusaoke, who visited him in Abuja that the federal government will grant incentives to encourage investments in the priority sectors listed in the recently released Economic Recovery and Growth Plan of the federal government.