(Ecofin Agency) - The Minister of Finance, Kemi Adeosun, has announced that the Central Bank has approved a licence for the Development Bank of Nigeria (DBN).
Speaking on Wednesday, Adeosun said the approval for the licence was granted after the bank met the minimum capital requirement of $326 million, proceeded to the reconstitution of its board and reviewed the structure of its organization. She explained that DBN aims to support small-scale businesses in the country and has a commitment of $1.3 bn (N396.5 billion) jointly provided by the World Bank, German Development Bank, the African Development Bank (AfDB) and the French Development Agency. In this framework, it is also finalizing agreements with the European Investment Bank (EIB).
According to the Minister, the development bank will provide loans at lower rates to actors of the economy’s various sectors. These include Micro, Small and Medium Enterprises (MSMEs) which are currently not supported by existing development banks.
It should be highlighted that 50% of Nigeria’s GDP is made up of small companies. And with this in mind, Adeosun said the Federal Government believes 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.”