Development Bank of Nigeria get licenced

Development Bank of Nigeria Plc (DBN) light brightened yesterday as the Central Bank of Nigeria (CBN) approved the grant of a Wholesale Development Finance Institution Licence with national authorisation to the wholesale bank.

The Minister of Finance, Mrs. Kemi Adeosun, who disclosed this in Abuja said the approval was conveyed in a letter addressed to the Managing Director/Chief Executive Officer of DBN dated March 28, 2017.

The letter, she said, 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 review of its organogram,” she added.

The DBN was conceived in 2014 but its take-off had been fraught with delays. President Muhammadu Buhari administration, which inherited the project from the Goodluck Jonathan government has, however, demonstrated a determination to resolve all outstanding issues and set a target of 2017 for its take-off.

According to the Minister of Finance, the DBN with an initial capitalisation of $1.3 billion (N396.5 billion) 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), will support efforts by other development finance institutions to boost financing for industrial and economic growth of the country. The bank is also finalising agreements with the European Investment Bank (EIB)for additional funding.

Adeosun 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 per cent to the Gross Domestic Products (GDP) of Nigeria but have access to only about 5 per cent of lending from Deposit Money Banks (DMBs).

Government expects that the influx of additional capital from the DBN will lower borrowing rates and provide longer tenure loans to provide the required flexibility in the management of cash flows, giving businesses the opportunity to make capital improvements and acquire equipment or supplies.

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