The President of
the federal republic of Nigeria Goodluck Ebele Jonathan (GCFR) yesterday the
23rd of March 2015 inaugurated the Development Bank of Nigeria (DBN) at the
Presidential Villa, Abuja.
The Development
Bank Of Nigeria will commence full operations with a startup capital of $1.5
billion (about N300 billion), with the expectation of the capital to increase
to $5 billion (N1 trillion) in the medium term and, ultimately, to N2 trillion
in 10 years.
It will also allow
Micro, Small and Medium Enterprises (MSMEs) a longing time before they start
repaying and also allow them to match loan terms with longer term investment
cycles.
Development Bank will
lend to specific 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 bank will be expected to disburse over 200,000 new
loans to Micro, Small and Medium Enterprises (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.
The President while
giving his address said he was passionate about the DBN as it represents a
milestone in his administration’s efforts to empower MSMEs, saying it forms the
backbone of Nigeria’s economy.
He also said: “The
recent rebasing of our economic 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 employs about six
per cent of our labour force.
The Finance
Minister and the Coordinating Minister of the Economy, Dr. Ngozi, Okonjo
Iweala, said the establishment of the bank was for a robust finance backing for
small and medium enterprises.
She also said 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.
The Minister of
Industry, Trade and Investment, Olusegun Aganga, said the Bank of Industry gave
out over N400 billion loans in the last four years to businesses in the
country.
The Vice President
of the African Development Bank, Solomon Asamoah, said the new bank would
contribute to bridging funding gaps for Nigeria’s SMEs and also help to create
jobs.
The Governor of the
Central Bank Godwin Emefiele said that the Bank would join others in
channelling needed funds to the SMES.
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