By Emma Ujah
THE Central Bank of Nigeria, CBN, has approved a wholesale development finance institution licence with national authorization for the Development Bank of Nigeria, DBN Plc, the Minister of Finance, Mrs. Kemi Adeosun, has confirmed.

Governor of Central Bank of Nigeria; Mr Godwin Emefiele and Minister of Finance, Mrs. Kemi Adeosun

In a letter to the Managing Director/Chief Executive Officer of DBN dated March 28, 2017, signed by the Deputy Governor of the CBN in charge of Financial System Stability, the approval was, however, made subject to meeting the minimum capital requirement of N100 billion, reconstitution of the Board of the bank and reviewing its organizational structure.

The DBN, was conceived in 2014 but its take-off had been fraught with delays. While reviving the process of the bank’s take off, Adeosun said 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).

Medium to long-term loans

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).

A statement signed by the director of information in the Finance Ministry, Salisu Na’Inna Dambatta said “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 five 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.”