CBN issues license to Development Bank of Nigeria

The Central Bank of Nigeria (CBN) has issued license to the Development Bank of Nigeria (DBN) of the Federal Ministry of Finance.

The bank aims to support small-scale businesses with loans of varying lengths at lower interest rates than currently available as the country contends with its first recession in 25 years.

According to the Minister of Finance, Mrs Kemi Adeosun, the DBN which set to kick off operations is being positioned to galvanise the Micro Small‎ Medium Enterprises (MSME) for the overall development of the nation’s economy.

Adeosun said approval for the licence was subject to meeting the minimum capital requirement of N100 billion ($326 million), the reconstitution of the bank’s board and a review of the organisation’s structure.

The development bank has $1.3 billion in seed money provided by the World Bank, African Development Bank and German state bank Kfw, the finance ministry said on its Twitter feed.

“The government expects that the influx of additional capital from the DBN will lower borrowing rates and the longer tenure of the loans, will provide the required flexibility in the management of cash flows”, she said.

The ministry has previously said that 50 percent of the GDP in Africa’s largest economy is made up of small companies.