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Development Bank of Nigeria Interest Rate Check 2020 Interest Updates.
DBN Interest Rate: DBN is poised to provide funding and risk-sharing guarantees through Participating Financial Institutions, who will then on-lend to end beneficiaries. DBN grants facilities of up to 10 years tenor, at interest rates much lower than those of commercial banks and micro-finance banks read through for its 2020 interest rates.
The Development Bank of Nigeria was set up by the Federal Government to confront financing difficulties hindering private sector investment in the country. The bank is to play an important and catalytic role in providing funding and risk-sharing facilities to Micro, Small, and Medium Enterprises.
The target of DBN is to overcome the funding gap in the Micro-, Small- and Medium-scale Enterprises space and help businesses unlock opportunities across Nigeria.
DBN’s ambition is strengthened by the financial and technical support of international partners, including the European Investment Bank and the African Development Bank.
The new institution builds on international experience and uses a business model that has demonstrated proven success to enhance private-sector investment across Africa and around the world where other financing options are inadequate or absent.
About Development Bank of Nigeria
The Development Bank of Nigeria (DBN) was conceived by the Federal Government of Nigeria (FGN) in collaboration with global development partners to address the major financing challenges facing Micro, Small and Medium Scale Enterprises (MSMEs) in Nigeria.
Its main objective 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.
How to Get a DBN Loan
To receive a DBN loan, your business is required to apply through its financial institution, which must be one of those registered to participate as an intermediary in the DBN loan scheme.
Your financial institution will conduct its due diligence on your business and, upon qualification and approval, forward your application to DBN. The money will then be disbursed to your business through your financial institution.
To get a loan from the Development Bank of Nigeria, do the following:
- 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.
- The Bank appraises the business and loan purpose, and if its assessment is favorable, the Bank applies to DBN for funding.
- If DBN approves the loan, DBN will disburse to the Bank for on-lending to end borrowers.
Eligibility Criteria for a DBN Loan
There are specific requirements that SMEs in Nigeria must fulfill to access DBN loans. However, in this section, we will discuss the requirements that PFIs must satisfy before receiving financing from the DBN. The PFI is required to maintain these requirements all through the financing period.
It is important that the PFI doesn’t breach the requirements. This is because the DBN or one of its representatives conducts due diligence processes annually to check. If the PFI breaches these requirements and doesn’t make amends during the grace period it will have to pay up all advances.
Now, let’s look at the eligibility requirements a PFI must satisfy:
a. It must possess a valid license issued by the CBN to run a banking or financial company in Nigeria.
b. It has to provide details about the last three financial years along with two years of profitable lending. Also, it must show its risk management controls and procedures along with acceptable loan portfolio levels in performance and quality.
Development Bank of Nigeria Interest Rate
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.
DBN loan offers flexible interest rates that are based on tenure and referenced to market rates.
DBN grants facilities of up to 10 years tenor, which could include a moratorium period of 18 months, at interest rates much lower than those of commercial banks and micro-finance banks.
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