Nigeria sets up new bank dedicated to SMEs
It will offer long term funding at low rates to small businesses.A new bank dedicated to small and medium-sized enterprises (SMEs) will be established in Nigeria to address the difficulties these companies face to access credit.
The new entity is called Development Bank of Nigeria (DBN), and will benefit from a $1.3 billion initial capital, acquired from the World Bank, the African Development Bank, the European Investment Bank and the federal government, among others.
"SMEs are part of the engine that will spur the growth of our economy. SME lending at low rates will now be facilitated through the bank and we are ready to resolve the outstanding issues. We need to get the money into the hands of smaller business that make 50 per cent of our GDP," said
the Minister of Finance, Kemi Adeosun, quoted by the Daily Trust.
The DBN will support medium to long-term lending, with a duration of up to 10 years, which is usually not provided by commercial banks and the capital market.
In addition to contributing to small business development, the objectives of the bank also include strengthening financial inclusion and the redistribution of income, as well as encouraging job creation.