Here’s How MSMEs Can Access, Benefit From DBN Funds/Loans

On March 28, 2017, the Development Bank of Nigeria (DBN) Plc got licensed by the Central Bank of Nigeria (CBN) as a wholesale development finance institution with national authorization.

As a wholesale bank, DBN will lend wholesale to Microfinance Banks and deposit money banks which will on-lend medium to long-term loans to micro, small and medium enterprises (MSMEs).

The Managing Director Tony Okpanachi, has been counselling (MSMEs) in Nigeria on how to access funds from the bank.

He spoke at the recently concluded SMEs Clinic in Lokoja, Kogi State. Okpanachi said, as a development finance institution (DFI), funds are disbursed from DBN through commercial banks, microfinance banks and other licensed financial institutions.

Vice President Prof. Yemi Osinbajo launched the SME Clinic. Okpanachi noted that MSMEs are the driving force behind every local and foreign economy, reiterating the bank’s commitment towards providing enabling environment for businesses in the country to access required funding.

He told the entrepreneurs: “To ensure you are getting the best deal for your business, let me share with you how to access funds from DBN. The bank is a wholesale DFI. That means you can only access DBN funds through your commercial banks, microfinance banks or any other licensed financial institutions we do business with.

The Criteria

The most basic criteria to benefit from the DBN loan are: you must apply through your bank; the loan sought for must be long term; you should have reasonable book keeping; and your bank (micro finance or commercial bank) must run a due diligence and qualify you.

DBN receives the exact loan request through the PFI, checks the tenure and the terms of condition offered before it disburses. That means, DBN would only disburse funds on specific demands which will hit the account of the beneficiary in 72hrs.

The PFIs don’t have access to their allocated funds until they submit requests for beneficiaries. “We have a system that ensures that the funds hit the account of the end borrowers within 72 hours.

“DBN will make facilities of up to 10 years tenor including a moratorium period of 18 months available to MSMEs and entrepreneurs for the first time on an interest rate that will be worked out based on prevailing market conditions at the time the loan was issued. However, the interest rates will still be much lower relative to the conventional lending rates at commercial banks and micro finance banks.”

We are close to on-boarding several microfinance banks. We will deposit money in these banks to ensure full coverage of the country to access our loans.

“DBN is an institution that cares deeply about the MSMEs segment. Therefore, we are taking steps to find ways to collaborate with several stakeholders within our industry to ensure you entrepreneurs, farmers, traders and small business owners have access to loans that can help you grow your business. We shall be publishing the names of the participating financial institutions as we sign them.”

Furthermore Okpanachi  disclosed: “Our lending activities officially kicked off on October 30th, 2017. We made available N5 billion for on-lending to 20,000 MSMEs across the country through three micro finance banks.

So far, we have been able to track the disbursed funds through the MFBs. We are already beginning to see the impact in each sector. For instance, we have activities ongoing in Trade and Commerce, Education, Real Estate Activities and Agriculture.

“Additionally, we have seen that of the funds disbursed, men have accessed 69 percent while women have accessed 31 percent. I believe more women should access our loans. Women have been doing a great job of managing their small businesses well in this state.

“In the past, other development financial institutions try to make an impact in the economy with mixed results. As entrepreneurs, small business owners, farmers, traders from this state, you know accessing finance from banks is challenging. I am sure many of you have found it difficult to get longer tenor funding for your businesses. There was a need to fill that gap