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AfDB, European Bank stake $70m in DBN to drive SMEs—Okpanachi

Less than one year of its takeoff, the Development Bank of Nigeria (DBN) has attracted cooperation and investments from two leading international finance organizations and partnerships of more commercial banks in Nigeria in the encouragement of Small and Medium Enterprises (SMEs).

In an interactive roundtable with select leading media organizations in Abuja including Business Hilights, the Managing Director/Chief Executive Officer of DBN, Mr. Tony Okpanachi, who was appointed in November, 2017, made it clear that his primary mission was to grow the informal sector of the economy through resolving funding challenges of the Micro, Small and Medium Enterprises (MSMEs) and small corporates in Nigeria.

He explained that due to the tenacity he had applied in discharging his duties as the chief executive in the last few months, which includes providing financing, partial credit guarantees and technical assistance to eligible financial intermediaries on a market-conforming and fully financially sustainable basis, “We have equity shareholders coming in, that is African Development Bank (AfDB) and the European Bank”.

“They have invested $50 million and $20 million respectively. So effectively, they are shareholders of DBN. So, the announcement that was made was to effect that they have committed and that they are going into it and looking at the publication from our issuing house, DLM, (Securities and Exchange Commission (SEC) has approved the basis of allotment.

Managing Director/Chief Executive Officer of DBN, Mr. Tony Okpanachi

While revealing that both international bodies are now key shareholders in DBN, Okpanachi disclosed that “The $50 million from ADB and European Bank are already in the system; so now, the bank is owned by the Federal Government, NSIA (National Sovereign Investment Authority), ADB and European Investment Bank (EIB)”.

Besides, he recalled that “From November 1, 2017, we started our lending activities with three microfinance institutions. We have made available to them almost N5 billion and this was supposed to be for several Small and Medium Enterprises (SMEs). Since we are a wholesale institution, we work through financial institutions. So when they come with their clients, we make a line available to them and we draw on the line.

“What is available now to the three microfinance institutions is about N9 billion. So, as they are bringing their clients on board, we sign them on. Beyond that, we have started bringing on board some commercial banks, which you can see on our website. We have also made lines available to them, so as they come, we draw down the line and that’s when we will begin to give actuals.

“But I’m glad to tell you that we have almost nine currently on our list both of commercial and microfinance banks and between now and the end of June, we expect more commercial banks. So, as the commercial banks come up, knowing they have more of the volumes, we will hear more from them.

According to him, some of the Primary Finance Institutions (PFIs) that have signed so far include Wema Bank, Ecobank, Sterling Bank, Diamond Bank, Fidelity Bank.

“For the microfinance banks, we have microcredit, infinity, busack. There was an issue with Fortis; I understand they had issues with accessing the fund. We have not disbursed to them yet; I know they are working towards meeting the conditions that will enable them to access the funds. We have not disbursed to them yet.

On meeting set criteria, DBN boss averred that “For us, we receive the exact request, check the tenure and the terms of condition offered before we disburse. So, we disburse for on-lending not for life for them to hold on to.

He made it clear that “We have a mechanism within our system that ensures that the funds hit the account of the end borrowers within 72 hours. Beyond that, we follow up on them to see the impact made by the borrowing”.

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