Development Bank of Nigeria plans to give out up to 20,000 new loans to small businesses within its first year of operation as part of efforts to help unlock credit to the economy. Small scale enterprises make up 60 percent of Nigeria’s economy.
Chief Executive Officer of DBN, Tony Okpanachi, told Reuters that the new development bank will lend to local commercial banks and microfinance institutions that will then make loans to small firms, helping boost economic growth and jobs.
Okpanachi said the bank will grant loans of up to 12 years’ maturity, longer than usual for the West African country, to enable the financing of new projects that would not be viable with short-term funds and in dollars.
“The focus is on new loans. We know agriculture is a focus area, we will encourage that. We know other small industries. We would also try to encourage those sectors that will give maximum impact to the economy,” he stated.
The DBN CEO said the development bank aims to secure a credit rating from an international agency and to raise fresh capital within three to five years of operation. The bank’s board is made up largely of non-executive directors appointed through a competitive process to ensure proper corporate governance, he said.
The newly licensed bank has the Federal Government, African Development Bank (AfDB), European Investment Bank, World Bank and KfW of Germany as initial investors, with start-up capital of $1.3 billion. It aims to start lending in August.