AfDB grants $500 million to support the launch of the Development Bank of Nigeria
The African Development Bank (AfDB) approved on December 15th a funding of $500 million (€400 million) to support the launch of the Business Development Bank of Nigeria (DBN).The African Development Bank (AfDB) approved on December 15th
a funding of $500 million (€400 million) to support the launch of the Business Development Bank of Nigeria (DBN).
The financial package consists of loans of $450 million and an equity investment of $50 million in the new bank, which will be dedicated to the financing of micro, small and medium-sized enterprises (MSMEs) in the country.
"The MSME sector is critical to the development of the Nigerian economy as it possesses great potential for employment generation and output diversification," said Stefan Nalletamby, Director of the Financial Sector Development Department at the AfDB Group and Coordinator of the MFW4A Partnership.
He added: "MSMEs in Nigeria cover the entire range of economic activity; nevertheless, there has been gross under-performance of these enterprises and this has undermined their contribution to economic growth. Among the issues affecting their performance, the shortage of finance, particularly investment finance, occupies a very central position. Therefore, through the DBN, the AfDB Group will contribute to mobilizing significant long-term financing to an important yet underserved sector with high development potential."
The DBN is being established by the Federal Government of Nigeria (FGN) in close partnership with international development financial institutions such as the AfDB Group, the World Bank, KfW of Germany and the French development agency, Agence Française de Développement (AFD).