DBN to Sign on Commercial Banks, More MFIs before Year-end

•  German investor satisfied with bank’s operations

Ndubuisi Francis in Abuja

Newly-established wholesale development finance institution–Development Bank of Nigeria (DBN) said it is to sign on commercial banks and more Micro Finance Institutions (MFIs) before the end of the year.

DBN recently commenced lending activities with N5 billion for disbursement through three microfinance banks (MFBs).
The amount is for onward lending to over 20,000 micro small and medium scale enterprises (MSMEs) spread across the country.

The bank’s Managing Director, Mr. Tony Okpanachi, who disclosed this while receiving a delegation of the KFW Development Bank of Germany, in Abuja, at the weekend, said the bank has commenced discussion with some deposit money banks (DMBs) and more MFIs.

KWF is a major investor in DBN
According to him, the engagements would culminate in signing deals with them, with a view to expanding the opportunities available to operators in the Small and Medium Scale Enterprises (SMEs) sub-sector of the nation’s economy.

Okpanachi said: “Currently, we are in discussion with several of them. Before the end of the year, we are going to sign on more Micro Finance Institutions and some commercial banks. So we expect that before the end of the year, we will make more announcements as we tie them up.”
His team, he said, undertook a study tour to Germany in order to take advantage of the long experience of KFW in order to run a sustainable development bank in Nigeria.

His words: “About September, we undertook a study tour to KFW to understand, because we are more like sister firms, working together. So we undertook a study tour there to be able to understand how they have been able to sustain this model for all these years.

“The culmination of that is the technical support that came from them and experience sharing with us, in addition to the funding they provided for us.”

“We want the assistance to continue. They have a long history of successful operations and DBN wants to learn a lot from them. We want a continuous assistance from them. We want their willingness to support us as we continue in the journey.”

Earlier, the leader of the delegation and Director of West Africa and Madagascar, Mr. Michael Wehinger, who expressed satisfaction over the operational model adopted by the DBN, said that his organization was ready to provide more funding for the bank.

According to him, KFW saw DBN as a natural partner through which the Germany and KFW, in particular could channel efforts towards strengthening the Nigerian SME sub-sector.

He added: “When the Nigerian government took the decision to establish a Development Bank of Nigeria, we saw ourselves as a natural partner to the bank. We put our funds into it and we also put our knowledge into the process. I am happy all members of the delegation here have had the opportunity to share their views and review the progress in the establishment and operations of the DBN.

“It was the wish of the KFW and the German government to support the bank which fosters and promotes SMEs activities because the Nigerian economy, like others need the SMEs to grow,” he said.

On his assessment of the performance of DBN, the director said, “I think DBN is making good progress. It is not easy to establish a bank from the scratch but it is a good opportunity to get things right and I think DBN is in a good position. It has taken up operations as we have been told and I think it is really a good progress towards financing SMEs in Nigeria.

“For the time being, I think there is a lot of money on the table which has to be used. But our point of view is that this will be a long time relationship. We are of the view that as the need arises, in the future, we can extend our funding to DBN.

“We are really satisfied. We are also satisfied that having had the management of DBN recently in Germany, it is our sister institution. There were a lot of talks among managements of our domestic partners and the management of the DBN. There was a lot to be shared and to be transferred from our own experience in KFW.

“My impression is that they have been quite enriched and satisfied on that meeting. A lot of ideas have been brought up which can be implemented in the operations of DBN,” he added.

According to him, in the future, his organisation would like DBN to expand its funding to include new area such as renewable energy saving technology which would help SMEs to run more profitably.