The Development Bank of Nigeria (DBN) is a government-owned development finance institution (DFI) that was established in 2017 to provide long-term financing and technical assistance to Micro, Small and Medium Enterprises (MSMEs) and small corporates in Nigeria.Thank you for reading this post, don't forget to subscribe!
DBN’s mission is to “alleviate financing constraints faced by MSMEs and small Corporates in Nigeria through the provision of financing and partial credit guarantees to eligible financial intermediaries on a market-conforming and fully financially sustainable basis.”
DBN’s shareholders are the Ministry of Finance Incorporated (MOFI), the Nigeria Sovereign Investment Authority (NSIA), the African Development Bank (AfDB), and the European Investment Bank (EIB).
DBN’s products and services include:
- Finance to Finance On-lending Scheme: This on-lending scheme is designed specifically for Financial Institutions (FI) with lending operations to MSMEs. DBN provides the FI with a loan, which the FI can then on-lend to MSMEs at a lower interest rate.
- Long Term Finance Scheme for PFIs: DBN provides Participating Financial Institutions (PFIs) with long-term financing to support their lending to MSMEs for a period of up to 10 years.
- Partial Credit Guarantees: DBN provides PFIs with partial credit guarantees, which can help to reduce the risk of lending to MSMEs.
- Technical Assistance: DBN provides technical assistance to both the PFIs and the ultimate end borrowers. This assistance can help to improve the capacity of the PFIs to lend to MSMEs and to help the MSMEs to develop their businesses.
DBN has a number of goals, including:
- To increase access to finance for MSMEs and small corporates in Nigeria.
- To create jobs and boost economic growth.
- To reduce poverty.
- To promote financial inclusion.
DBN is a relatively new institution, but it has already made a significant impact on the Nigerian economy. In its first two years of operation, DBN has approved loans and guarantees worth over $1.5 billion. This lending has helped to create over 100,000 jobs and to boost economic growth.
DBN is a valuable asset to the Nigerian economy and it is playing a key role in supporting the growth of MSMEs and small corporates. DBN is committed to helping to create a more prosperous and inclusive Nigeria for all.
Who is Eligible For The Development Bank of Nigeria Loan?
The Development Bank of Nigeria (DBN) provides loans to small and medium-sized enterprises (SMEs) involved in productive enterprises. To be eligible for a DBN loan, the SME must:
- Be registered with the Corporate Affairs Commission (CAC).
- Have been in operation for at least 2 years.
- Have a good credit history.
- Be able to provide collateral.
- Be a customer of an eligible financial institution.
Eligible financial institutions (PFIs) include:
- Commercial banks
- Microfinance banks
- Development finance institutions (DFIs)
- Other financial institutions
The DBN offers a variety of loan products, including:
- Working capital loans
- Term loans
- Equipment loans
- Trade finance loans
The interest rates on DBN loans are market-conforming and fully financially sustainable. The repayment period for DBN loans is flexible, up to 10 years with a moratorium period of up to 18 months.
To apply for a DBN loan, you must contact an eligible financial institution. The PFI will assess your application and, if approved, will on-lend the funds to you.
Here are the steps on how to apply for a DBN loan:
- Contact an eligible financial institution.
- Fill out a loan application form.
- Provide the required documentation, such as:
- Certificate of Incorporation
- Memorandum and Articles of Association
- Business plan
- Feasibility study
- Quotation for the supply of equipment and/or machinery
- Quotation for the supply of raw materials
- The PFI will assess your application and, if approved, will on-lend the funds to you.
- You will then be required to sign a loan agreement with the PFI.
- The PFI will disburse the funds to your account.
- You will then begin repaying the loan to the PFI.
The DBN loan can be a great way to finance your SME’s growth. If you are eligible for a DBN loan, I encourage you to apply.
List of Commercial Banks You Can Get DBN Loans From
- Access Bank Plc
- Ecobank Nigeria Bank Plc
- Fidelity Bank Plc
- FCMB Ltd
- First Bank Nig Ltd
- Providus Bank
- Stanbic IBTC Bank Plc
- Sterling Bank Plc
- Union Bank of Nigeria
- Wema Bank Plc
These banks are participating financial institutions (PFIs) of the Development Bank of Nigeria (DBN). This means that they are authorized to on-lend DBN funds to eligible borrowers.
To apply for a DBN loan through one of these banks, you will need to meet the following eligibility criteria:
- You must be a Nigerian citizen.
- You must have a registered business in Nigeria.
- Your business must be profitable.
- You must have a good credit history.
The amount of loan you can get will depend on your business needs and the creditworthiness of your business. The interest rate on DBN loans is also market-conforming, which means that it is competitive with the interest rates offered by other banks.
If you are interested in applying for a DBN loan through one of these banks, you can contact the bank directly for more information.
List of Microfinance Banks You Can Get DBN Loans From
- AB Microfinance Bank Nigeria Ltd.
- Addosser Microfinance Bank
- Baobab Microfinance Bank
- Bosak Microfinance Bank
- HALAL Microfinance Bank
- Infinity Microfinance Bank Ltd
- Nirsal Microfinance Bank
- LAPO Microfinance Bank Ltd
- MainStreet Microfinance Bank Ltd
- NPF Microfinance Bank Ltd
- Parallex Microfinance Bank
- Seedvest Microfinance Bank
- Accion Microfinance Bank Ltd
- La Fayette Microfinance Bank Limited
- Davodani Microfinance Bank
- Trust Microfinance Bank
To access a DBN loan through any of these microfinance banks, you will need to meet the following eligibility criteria:
- You must be a Nigerian citizen.
- You must be a business owner or intending business owner.
- Your business must be registered with the Corporate Affairs Commission (CAC).
- Your business must be profitable.
- You must have a good credit history.
- You must be able to repay the loan.
Once you have met the eligibility criteria, you can apply for a DBN loan through your preferred microfinance bank. The microfinance bank will assess your application and, if approved, will disburse the loan to you.
The interest rate on DBN loans is typically lower than the interest rate on loans from commercial banks. DBN loans also have a longer repayment period, which can make them more affordable for small businesses.
If you are looking for a loan to grow your business, a DBN loan through a microfinance bank can be a good option.
Getting A Loan From The Development Bank of Nigeria
The Development Bank of Nigeria (DBN) is a government-owned financial institution that provides loans to micro, small, and medium-sized enterprises (MSMEs) in Nigeria. DBN loans are specifically designed to help MSMEs grow and expand their businesses.
To get a loan from DBN, you must first apply through a Participating Financial Institution (PFI). PFIs are banks, microfinance institutions, and other financial institutions that have been approved by DBN to lend money to MSMEs.
Once you have applied for a loan through a PFI, the PFI will assess your business and loan purpose. If the PFI’s assessment is favorable, they will apply to DBN for funding. If DBN approves the loan, DBN will disburse the funds to the PFI, who will then lend the money to you.
DBN loans have a number of benefits, including:
- Flexible repayment terms: DBN loans have repayment terms of up to 10 years, with a moratorium period of up to 18 months. This gives you plenty of time to repay the loan without putting too much strain on your cash flow.
- Competitive interest rates: DBN’s interest rates are competitive with other commercial loans. This means you can save money on your loan payments.
- Technical assistance: DBN offers technical assistance to both MSMEs and PFIs. This assistance can help you improve your business plan, manage your finances, and access other forms of financing.
If you are an MSME in Nigeria and you are looking for a loan to grow your business, DBN is a great option. DBN loans offer a number of benefits that can help you succeed.
Here are the steps on how to get a loan from DBN:
- Visit a Participating Financial Institution (PFI).
- Apply for a DBN loan.
- The PFI will assess your business and loan purpose.
- If the PFI’s assessment is favorable, they will apply to DBN for funding.
- If DBN approves the loan, DBN will disburse the funds to the PFI.
- The PFI will lend the money to you.
Here are the eligibility criteria for a DBN loan:
- The business must be located in Nigeria.
- The business must be an MSME.
- The business must have been in operation for at least 2 years.
- The business must have a good credit history.
- The business must be able to repay the loan.
To learn more about DBN loans, you can visit their website: https://devbankng.com/
What Is The Interest For A Development Bank of Nigeria Loan?
The interest rate for a Development Bank of Nigeria (DBN) loan depends on the type of financial institution (PFI) that you borrow from. For deposit money banks (DMBs), the current interest rate is up to 12.5% per annum (p.a.). For microfinance banks (MFBs) and other financial institutions (OFIs), the current interest rate is up to 16.5% p.a.
It is important to note that the actual interest rate that you will be charged will depend on your individual circumstances, such as the amount of the loan, the term of the loan, and your credit history. You should always carefully review the terms and conditions of any loan before you agree to it.
Here is a table of the current interest rates for DBN loans, as of August 2023:
|PFI Category||Interest Rate (p.a.)|
|Deposit Money Banks (DMBs)||Up to 12.5%|
|Microfinance Banks (MFBs) and Other Financial Institutions (OFIs)||Up to 16.5%|
The official interest rate in Nigeria is currently 18.50% p.a. However, the interest rates for DBN loans are typically lower than the official interest rate. This is because DBN is a development finance institution that is funded by the government and other development partners. DBN’s goal is to provide affordable financing to MSMEs, so it offers lower interest rates than commercial banks.
If you are looking for a loan for your business, you may want to consider applying for a DBN loan. DBN loans offer a number of advantages, including:
- Low interest rates
- Long repayment terms
- Flexible repayment options
- Collateral-free loans
- Technical assistance
To learn more about DBN loans, you can visit the DBN website or contact a participating financial institution.
DBN loans can be a great option for MSMEs in need of affordable financing. With their lower interest rates and flexible repayment options, they provide a viable alternative to traditional commercial bank loans. Additionally, the collateral-free nature of DBN loans can be particularly beneficial for small businesses that may not have significant assets to offer as collateral. Furthermore, the availability of technical assistance through the DBN can provide valuable support and guidance to entrepreneurs. Overall, DBN loans offer a comprehensive package that caters to the specific needs of MSMEs, making them a compelling choice for business owners seeking financial assistance.