The Development Bank of Nigeria (DBN) has commenced lending to eligible Participating Financial Institutions (PFIs) for on-lending to Micro, Small and Medium Enterprises (MSMEs).
At the commencement of the exercise yesterday in Abuja, the DBN disbursed N5bn to three micro finance banks. These PFIs are the first set to have met the criteria to access the loan. About 20,000 MSMEs are expected to benefit from the facility.
Recall Mr. Tony Okpanachi, the Managing Director/CEO of Development Bank of Nigeria (DBN), had told Daily Trust exclusively two weeks ago that the bank will start lending to partner banks for onward lending to micro, small and medium scale enterprises before the year ends.
DBN is a wholesale bank licensed in March 2017. It won’t be lending directly to individuals but to commercial banks and microfinance banks which will lend to the benefiting SMEs.
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).
He said “the DBN loan repayment tenure is flexible (up to 10 years with a moratorium period of up to 18 months) and the pricing is pragmatic and referenced to market rates” adding the loans will majorly be long term.
“Today, we are proud to announce our first three Participating Financial Institutions, all of who are National Micro Finance Institutions with coverage all over the nation. They are Fortis Microfinance Bank Plc, LAPO Microfinance Bank Ltd and NPF Microfinance Bank Plc” he said adding that “going forward, more Participating Financial Institutions including Commercial Banks, other DFIs, etc. would be signed on to access DBN loans which will be available to MSMEs who are already their customers across the nation.”
The Managing Director, Fortis Micro Finance Bank (MFB), Mr. Tiko Okoye, said the development is great and will impact positively on MSMEs. He noted that the funding challenges of the sector us partly being filled by the DBN funds and promise that the bank will ensure maximum utilization of the funds.