Development Bank of Nigeria: CBN approves licence

The Central bank of Nigeria (CBN) has approved the grant of a Wholesale Development Finance Institution Licence with national authorisation to the Development Bank of Nigeria (DBN) Plc.This was confirmed by the Minister of Finance herself, Kemi Adeosun in a recent statement issued on her behalf by the Director of Information of the ministry, Salisu Na’inna Dambatta.It said: “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.”Adeosun, said that 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).She also mentioned that the bank was putting finishing touches to agreements with the European Investment Bank (EIB), she said.Adeosun further explained 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 in turn lend medium to long-term loans to MSMEs”, she said.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).Still in the statement, 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.”