The Development Bank of Nigeria (DBN) has announced it will give up to 20,000 new loans to small businesses during its first year of operation as part of measures to provide more credit opportunities to the Nigerian economy.
The new development bank has a start-up capital of $1.3 billion and would start lending in August, 2017.
Tony Okpanachi, Chief Executive Officer of DBN, told Reuters that the bank will lend indirectly to the SMEs through local commercial banks and microfinance institutions.
According to him, loans will have about 12 years maturity period, which is different from the usual practice in Nigeria, to assist in financing new projects which is not feasible with short-term funds.
He added that the bank aim to secure a credit rating from an international agency 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.”
The Federal Government, African Development Bank (AfDB), European Investment Bank, World Bank and KfW of Germany are pioneer investors of the bank.