Individuals or businesses seeking loans to fund their ideas or expand their business might consider getting loans from the Development Bank of Nigeria (DBN) as an option.
The DBN is a development finance organization dedicated to assisting Micro, Small, and Medium-Sized Enterprises (MSMEs) in Nigeria with financing, partial credit guarantees, and technical assistance.
The Federal Government of Nigeria established the bank to give loans to Micro, Small, and Medium-Sized Enterprises in Nigeria. The bank does not give the loan to the borrower in cash, but rather through Nigerian intermediate banks.
Agro-processing, Solid Minerals, Information Technology, and Creative Industry are some of the sub-sectors that are being targeted.
Who qualifies for the DBN loan?
The loan is open to all MSMEs involved in productive enterprises, whether they are new or established. They must, however, be clients of qualified financial institutions.
DBN plans to give money and risk-sharing guarantees to Participating Financial Institutions (PFIs), who will subsequently lend to end beneficiaries.
PFIs, which include Commercial Banks, Microfinance Banks, Development Finance Institutions (DFIs), and other Financial Institutions, can access DBN loans.
The DBN loan payback length is flexible (up to 10 years with an 18-month moratorium period), and the interest rates are market-competitive and financially sustainable.
Which PFIs are eligible for the DBN loan?
To be eligible to receive financing from DBN, the PFI should have met the minimum eligibility requirements set out below on the Cut-Off Date. The PFI shall maintain the minimum eligibility requirements throughout the Financing Period.
DBN or its representative will conduct an annual due diligence process to confirm that the PFI is not in breach of the minimum eligibility requirements and may declare all advances to the PFI immediately payable if the PFI is in breach of one or more of the requirements or fails to remedy the breach of a requirement within any grace period allowed by DBN at DBN’s absolute discretion.
To be eligible for DBN financing, the PFI must have:
- A duly issued and valid license from CBN to conduct business like a bank or finance company.
- Two years of profitable lending operations in the three most recent financial years, with effective risk management procedures, controls, and acceptable levels of loan portfolio quality and performance
Eligibility Criteria CLICK HERE
How to get a DBN loan from your bank
1. Visit your bank: Commercial Bank, Microfinance Bank, Development Finance Institution (DFI) and other Financial Institutions and indicate you want to apply for a DBN Loan.
2. The Bank appraises the business and loan purpose, and if its assessment is favorable, the Bank applies to DBN for funding.
3. If DBN approves the loan, DBN will disburse to the Bank for on-lending to end borrowers.
What you would need
- Official Government Identification
- Evidence of Company Incorporation (CAC Certificate)
- Debenture on assets of the company
- Bank Guarantee
What you should know
- Development Bank of Nigeria (DBN) does not lend directly to businesses. DBN loan is channelled through PFIs. PFIs carry out the credit evaluation and supervision of the loan.
- Depending on the nature of your business and loan purpose, you may have up to 18 months moratorium on principal repayment for working capital & investment projects, and up to 10 years to repay the loan.
- DBN loan offers flexible interest rates that are based on tenure and referenced to market rates.
- DBN loan is specifically targeted at small businesses to ensure that such businesses have increased access to financing. In addition, DBN loans have a longer tenure than other commercial loans, which are usually short-term.
You can get started with your DBN loan by contacting any of the PFIs listed here