The Managing Director, Development Bank of Nigeria (DBN), Mr. Tony Okpanachi, in a recent interview, explained factors that differentiate the Bank from other business and industry lenders.
With a lot of financial hitches facing MSMEs in Nigeria, despite the growing number of lenders in the country, he explained DBN’s effort to bridge the gap by opening its loan range to cover businesses in all sectors.
Speaking on what sets DBN apart from other lenders, he said, “When SMEDAN carried out their survey in 2015, it puts the number of MSMEs in Nigeria at about 37 million. So, no single financial institution will be able to do it all. The Bank of Industry focuses on industry and in some cases SMEs. NEXIM bank is providing exporters with funding. While the Bank of Agriculture focuses strictly on how to provide funding to farmers. For us at DBN, the difference is that most of these other institutions focus on specific sectors or areas, but DBN’s focus is on the whole gamut of the MSMEs space.”
DBN provides loans for legitimate businesses in all sectors of the economy as a wholesale DFI, which is what distinguishes the bank from the other lending banks, he explained.
He further said the Bank’s funding model, was to do all its financing through retail financial institutions that have existing relationships with the MSMEs.
The Managing Director also added that DBN loans come at lower interest rates compared to other commercial lenders, with an 18-month moratorium before the end borrowers can begin to service the loan, and a longer loan repayment period of up to 10 years.
Okpanachi, also noted that the capital intensive power sector is not left out of DBN loan. He said DBN will give loans to small and medium scale distributors or manufacturers in the power sector if their application is within the limit of DBN mandate.