Sterling Bank and other eight financial institutions have been selected by the Development Bank of Nigeria, DBN, to handle its intervention fund to entrepreneurs in the Micro, Small and Medium Enterprise MSMEs.
Tony Okpanachi, Managing Director, DBN, said the target of the bank was to provide long-term funding to about 20,000 MSME operators in the first year of full operation.
“We have started bringing on board some commercial banks; we have also made lines available to them so that as they come, we draw down the line. But I am glad to tell you that we have almost nine currently on our list, both commercial and microfinance banks; and between now and the end of June, we expect more commercial banks.”
The financial institution includes five commercial banks, Wema Bank; Ecobank; Diamond Bank; Fidelity Bank and four microfinance banks made up of MicroCredit, Infinity, Busack, and Fortis.
Okpanachi noted that DBN would simplify its loan application processes to enable more entrepreneurs in the MSMEs to have access to its intervention fund and provide long-term funding for small business owner.
He also expressed the readiness of the Bank to support startups noting that once a project comes and they assess it to be bankable, the bank is ready to take up the risk with them to give funding for start-ups.
Recently, the bank announced a $70 million equity injection from the European Investment Bank, EIB, and the African Development Bank, AfDB, to strengthen lending for all classes of business in the country.
The fund will see European Investment Bank inject $20-million equity stake in the financing institution, alongside US $50-million equity participation from the African Development Bank.
The DBN, created by the Federal Government of Nigeria to address financing challenges hindering private sector investment in the country.
The Bank is expected to provide funding and risk sharing facilities to micro, small and medium enterprises as well as small corporates. With funding partners from The World Bank, African Development Bank, French Development Agency, and Kfw Development bank of Germany.