President Goodluck Jonathan yesterday inaugurated the Development Bank of Nigeria (DBN) at the Presidential Villa, Abuja. As stated by the Finance Minister and the Coordinator of the Economy, Dr. Ngozi Okonjo-Iweala, the establishment of the bank was for a robust finance backing for small and medium enterprises. She stated that the wholesale developmental institution plans to offer loans to at least 20,000 beneficiaries in the first one year of its operations and to start business in the next nine months. DBN will commence operations with a startup capital of $1.5 billion (about N300 billion), and is projected that the capital will increase to $5 billion (N1 trillion) in the medium term and, ultimately, to N2 trillion in 10 years. It will support the medium to long-term lending needs of Micro, Small and Medium Enterprises (MSMEs) with duration of about 10 years and moratorium period of about 18 months. It will also allow MSMEs a breathing period before they start repaying and also allow them to match loans terms with longer term investment cycles. The DBN will lend to specialised institutions of the Bank of Industry (BoI) and the Bank of Agriculture, (BoA) and the commercial banks for lending to small and medium enterprises (SMEs). In the first five years of operation, the DBN is expected to disburse over 200,000 new loans to MSMEs, and with each SME creating an average of five new jobs, it is expected that the DBN will result in one million direct jobs being created, as well as several more indirect jobs. President Jonathan said he was passionate about the DBN as it represents a milestone in his administration’s efforts to empower MSMEs, saing it forms the backbone of Nigeria's economy. His words: "The recent re-basing of our economy exercise confirms the importance of MSMEs sector for our national economy. Currently Nigeria has 17 million of these businesses which contributes about 45 per cent of our GDP and employ about six per cent of our labour force." The Minister of Industry, Trade and Investment, Olusegun Aganga, stated the BoI gave out over N400 billion loans in the last four years to businesses in the country. The Vice President of the ADB, Solomon Asamoah, stated the new bank would contribute to closing funding gaps for Nigeria’s SMEs and also help to create jobs. The CBN Governor Godwin Emefiele stated that the Bank would join others in channelling needed funding to the SMES. "We will ensure they get they required support in channeling the badly needed funding for the SMEs in unrestricted way. As the DBN are stated to have succeeded in other countries, it will succeed here because they have taken global success stories to improve on them. The Federal Government is hopeful that the jinks on financial will be broken in the 10 years tenure of the DBN," he stated.
