The Development Bank of Nigeria, DBN, has announced a $70 million equity injection from the European Investment Bank, EIB, and the African Development Bank, AfDB, to strengthen lending for all classes of business in the country.
A breakdown of the fund shows that the European Investment Bank will inject $20-million equity stake in the new financing institution, alongside US $50-million equity participation from the African Development Bank.
The DBN, created by the Federal Government of Nigeria to address financing challenges hindering private sector investment in the country.
It is estimated by the DBN that only 5% of the 37 million entrepreneurs and small businesses in Nigeria that contribute to 50% of GDP can access credit in the financial system.
The Bank is expected to provide funding and risk sharing facilities to micro, small and medium enterprises as well as small corporates.
The DBN was conceived in 2014. The focus of the bank includes lending to Medium Small Scale Enterprises.
Its funding partners include The World Bank, African Development Bank, French Development Agency, and Kfw Development bank of Germany.
The European Investment Bank was established in 1958. It is the long-term lending institution of the European Union and owned by its Member States.
The African Development Bank is a development finance institution whose overarching objective is to spur sustainable economic development and social progress in its regional member countries, thus contributing to poverty reduction.