The African Development Bank, AFDB, and European Investment Bank (EIB) yesterday announced the injection of $70 million equity investment into the newly created Development Bank of Nigeria (DBN) in other to boost access to credit in Nigeria. AfDB NIGERIA COUNTRY COMPLEX IN ABUJA, Meanwhile, the DBN has estimated that only five percent of the 37 million entrepreneurs and small businesses in Nigeria that contribute to 50 percent of GDP can access credit in the financial system. In a joint statement, the two institutions said that the funding support, which comprises $20 million equity from the EIB and $50 million equity from the AfDB, is to strengthen lending for business and agriculture investment in Nigeria.
“At present, new investment essential for companies to expand and create jobs is hindered by limited access to commercial banks. The Development Bank of Nigeria has been created by the Federal Government of Nigeria to address financing challenges hindering private sector investment in the country. The Bank is called to play an important and catalytic role in providing funding and risk sharing facilities to micro, small and medium enterprises as well as small corporate, they said Commenting, Managing Director of the Development Bank of Nigeria, Tony Okpanachi, said: “The Development Bank of Nigeria will 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 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”. Explaining the rationale for AfDB’s investment in DBN, Director of the Financial Sector Development Department at the bank, Stefan Nalletamby, stated: “Private sector businesses are critical to the development of the Nigerian economy as they possess huge potential for employment generation and output diversification. Nevertheless, there has been under-performance of these businesses and this has undermined their contribution to economic growth.