How MSMEs Benefit from DBN Loan
Development Bank of Nigeria Chief Economist, Prof. Joseph Nnanna was a special guest on the morning drive programme on Beat FM and Naija Info FM stations in Lagos on Tuesday, October 8th. He spoke extensively on the mission of DBN and its loan benefits to SMEs.
Here are key take home from the interview:
Development Bank of Nigeria was conceived by the Federal Government of Nigeria in collaboration with World Bank, African Development Bank, KfW Development Bank, French Agency for Development, and European Investment Bank, to alleviate financing constraints faced by MSMEs and small Corporates in Nigeria.
DBN loan is available to Micro, Small and Medium Scale Enterprises (MSMEs) in Nigeria that are duly registered with the Corporate Affairs Commission (CAC).
DBN loan is distinctively different from regular commercial bank loans as it gives up to 10 years for repayment of the loan, and up to18 month’s moratorium.
There’s no fixed interest rate on DBN loan. The interest rate for the loan is usually determined after a particular business is properly assessed and found eligible for the loan.
DBN loan can only be secured through partner commercial and microfinance banks referred to as Participating Financial Institutions (PFIs). There are currently 29 PFIs on DBN list.
DBN provides partial credit guarantee to PFIs. This is a form of risk-sharing buffer that enables the PFIs to provide loans to SMEs.
DBN also carries out Capacity Building activities to provide technical assistance to the Participating Financial Institutions and the end borrowers.
DBN has disbursed over N31 billion to 35,000 beneficiaries in the last two years.
DBN recently disbursed N25b to GTbank to lend out to MSMEs.
