DBN Will Be Devoid Of Political Interference, Govt Control – Adeosun

Gift Samuel, The Sight News

The Minister of Finance, Mrs Kemi Adeosun has said that the recently licensed Development Bank of Nigeria (DBN) will run on a private sector basis, devoid of any form of political interference.

The Minister who made the disclosure on Friday at a media briefing with the DBN’s Board members, said the bank’s activities is not going to be government controlled or influenced by politics, rather, it will be run on a best practice basis.

 

According to her; “We have learned from the ones in the past because what ruined the good ones in the past is political interference, lend to my local government, my family and my sister. So there is nothing like that. The Bank is one of the development the government has done in the area of financial inclusion, so the government will however step back to allow the Bank do its job successfully”.

 

While reiterating that SMEs contribute about 45 per cent to the GDP, she noted that only about 10 per cent of them have access to loan and are struggling on very little capital.

She said; “The Micro Finance Institution is thriving but very expensive,what we found is, that sector have lower capital, higher cost and yet they are surviving. If the cost of borrowing is brought down for that sector, they could do so much more.

“If we can give them cheaper money, longer term money, better access to money, they can really grow and they are the engine of the economy. We believe that by having a DBN which will mobilize capital to channel specifically to MSMEs, we will be able to grow that sector of the economy”.

In his remark, the Chief Executive, DBN, Mr Tony Okpanachi declared that with the Bank’s existence, it is a new dawn for the MSMEs, adding that the Bank’s main focus is to finance the micro businesses in a sustainable way to the development of the economy.

He said; “In our first year of operation, we are targeting that at least we would have done up to 20, 000 SME loans. On our take off date, a lot of work have been done behind the scene. We will look at the business impact and create an enabling environment for the them to access it”.

Okpanachi also noted that DBN will provide; long term funding for as long as 10 years,financial inclusion, job creation, female participation and encourage start ups, adding also that a sustainable model will be ran as it will build its own fund and run a lean structure with few staff and maximum impact.

 

He emphasized that the Bank will create capacity building for Participatory Financial Institutions(PFIs) to lend, saying that a guarantee scheme will be developed to guarantee up to 50 per cent of what ever risk is being taken by the PFI which he said will help encourage lending.

 

The DBN as a wholesale bank is structured to lend wholesale to Microfinance Banks which will on-lend   medium to long-term loans to MSMEs.

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