Jonathan launches Development Bank of Nigeria

President Goodluck Jonathan on Monday officially launched the Development Bank of Nigeria (DBN) that will disburse up to N300b in support of medium and long term lending.

The launch held at the Banquet Hall of the Presidential Villa where it was explained that the loans will have duration of up to 10 years and moratorium period of up to 18 months.

This is to enable Micro, Small and Medium Enterprises (MSMEs), a breathing period before they start to repay and also allow them to match loans terms with longer term investment cycles.

The President noted that the small and medium enterprises have always been the backbone of the nation’s economy, pointing out that the sector has never had the opportunity of accessing cheap funds for its development.

He disclosed that the nation had over 17 million MSMEs which employ over 32 million people while contributing over 45 per cent to the Gross Domestic Product (GDP).

According to him, existing developmental institutions in the country, including the Bank of Industry (BoI) and other commercial banks can not satisfy the funding needs of the MSMEs hence the establishment of the DBN.

He lamented : “Access to long term finance has been a challenge for the MSMEs. Most MSMEs cannot get long term funds from banks and other financial institutions, forcing them to spend on personal savings, friends and family for loans. These loans are typically short term and come at a high interest rate, thereby stemming the growth of these businesses.”

Jonathan said that the inadequacies of the nation’s commercial banks and other development banks, including the Bank of Industry (BoI) and Bank of Agriculture (BoA) necessitated the establishment of the DBN.

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