Development Bank of Nigeria (DBN) Plc, set up by the Federal Government to improve access to credit for small businesses, expects a boost in loans to small and medium enterprises (SMEs) after 15 more banks signed up to disburse the facilities this year.
Chief Executive Officer, DBN, Tony Okpanachi, who stated this in an interview with Bloomberg, noted that the 15 banks that were signed up by DBN were in addition to the seven that joined in 2017. He said that the bank is targeting loans disbursement of about N60 billion this year, adding that lending to SMEs is expected to reach “hundreds of billions of naira” in the coming years.
Okpanachi stated: “DBN has granted loans to about 10,000 small businesses this year, or half its target. We are going to see more up-tick from this July as the newly signed-up lenders bring their pipeline to us.”
Okpanachi who noted that less than 5 percent of the more than 37 million SMEs in the country have access to bank credit, said that providing credit guarantees may help curb the apathy that commercial banks have when it comes to lending to the sub-sector.
He asserted that with the current shareholders fund of $1.3 billion by the federal government, African Development Bank (AfDB), World Bank and other international development-finance institutions, DBN is unlikely to require new funding for at least another three years.
Established two years ago, DBN seeks to plug a gap left by banks that are investing in Nigerian Treasury bills that offer yields in excess of 14 percent and are considered less risky than providing credit to SMEs.