Nairametrics| After some weeks of dropping teasers about the creation of a new Development Bank of Nigeria to the public, yesterday the Ministry of Finance announced that the Central Bank had eventually given an operational license to the bank. As preparations for the kickoff of the new financial institution continues, we outline 5 key facts about the DBN you should know
- Old Wine, New Skin: The DBN was actually conceptualized in 2014 but never saw the light of day during the Jonathan administration. However, the Buhari administration vowed to make the project a reality as the Ministry of Finance sought ways to stimulate growth of MSMEs which they say make up about 50% of Nigeria’s Gross Domstic Product (GDP).
- Some work has been done…: Much work has been put in place for the DBN to kick in 2017. The first round of recruitment has been carried out and the FG has invited sealed bids from eligible bidders for the supply and installation of core banking software and related infrastructure for the DBN’s operations.
- …but still more work to be done: The operational license granted the DBN is still subject to its meeting certain requirements such as he reconstitution of the bank’s board and a review of the organization’s structure and meeting the minimum capital requirement of 100 billion naira. The last of the requirements should not be an issue though, as DBN has $1.3 billion in seed money.
- A multilateral project: The funding of the DBN is a multilateral project with the World Bank, African Development Bank and German state bank Kfw.
- Big Brother Role: Rather than service MSMEs directly, the DBN will provide funds to micro-finance banks, which will in turn provide these loans to MSMEs, at rates hoped to be lower than what the MSMEs currently receive.