How To Get A Loan From The Development Bank of Nigeria
Are you looking for information on how to get the development bank of Nigeria loan? Certainly, the development bank of Nigeria loan will help to provide funding for Medium, Small and Medium Enterprises (MSMEs) in Nigeria and boost the economy of the country.
The Development Bank of Nigeria is backed up by the Federal Government of Nigeria and licensed by the Central Bank of Nigeria (CBN) to provide loans to entrepreneurs and business owners in Nigeria.
The Development Bank of Nigeria has partnered with several deposit money banks, Development Finance Institutions (DFIs), commercial banks, microfinance banks etc for the purpose of on-lending of medium & long-term loans to Medium, Small and Medium Enterprises (MSMEs). This bank does not give loan directly to the borrower, rather, the loans are accessible through the help of Participating Financial Institutions (PFIs) in Nigeria.
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Since the creation of the DBN in 2017, the institution has disbursed loans of over ₦30,000,000,000 (thirty billion naira) to over 35,000 businesses in the country. It is said they the institution could disburse loans to the rate of ₦100,000,000,000 (hundred billion naira) as the demand increases.
While they receive more loan applications from entrepreneurs, the Development Bank of Nigeria is expanding its capacity to give out loans for businesses to enable them to scale their operations. Therefore, if you are looking to get loans to start a business in Nigeria, the Development Bank of Nigeria will be a great option to consider.
Capital is one of the necessities required to start a business. As a matter of fact, you need capital to start a business, grow the business and keep the business running. Without enough capital, the business can ruin and collapse.
Actually, inadequate capital is one of the reasons why some companies failed. Many businesses were liquidated because they had no money to clear off outstanding debts.
Lack of capital has stopped a lot of brainy entrepreneurs from executing their explosive business ideas. Low capital shouldn’t make you abort your business dreams anymore because you can get loans to fund your small and medium business.
The Development Bank of Nigeria was set up by the Federal Government of Nigeria in partnership with some foreign and international partners to tackle the financial challenges faced by Micro, Small and Medium Scale Enterprises (MSMEs) in Nigeria.
Some of the development partners that have collaborated with the Development Bank of Nigeria include;
- The World Bank.
- African Development Bank (AfDB).
- European Investment Bank (EIB).
- French Agency for Development (AFD).
- KfW Development Bank.
With a capital base of $1.5 billion and ₦100 billion from partners, the DBN aims to make significant contributions to the growth of small businesses in Nigeria.
DBN targets petty traders, farmers and medium & small business owners. Also, the loan targets those who work in the field of commerce, trade, education, real estate and agriculture.
Other sub-sectors include:
- Creative Industry.
- Information Technology.
- Solid Minerals.
SME Term Loan
DBN offers SME loan products to provide funding to small businesses. This loan is tailored to meet the business needs, requirements and also help business owners to accomplish their business projects, goals and targets.
The Development Bank of Nigeria (DBN) offers risk-sharing facilities and wholesale term funding to eligible retail intermediaries who are known as the ‘Participating Financial Institutions (PFIs)’. These Participating Financial Institutions include commercial banks, microfinance banks, development banks, leasing companies etc, they give DBN loans to MSMEs.
The Development Bank of Nigeria provides SMEs with loans of up to ₦5 million.
Participating Financial Institutions (PFIs)
The Participating Financial Institutions (PFIs) that disburse the DBN loans are financial institutions such as Development Finance Institutions (DFIs), commercial banks, microfinance banks.
Applicants can get loans from the Development Bank of Nigeria through any of the following financial institutions listed below:
- AB Microfinance Bank Nigeria Ltd.
- Access Bank Plc.
- Accion Microfinance Bank Limited.
- Addosser Microfinance Bank.
- Baobab Microfinance Bank.
- Bosak Microfinance Bank.
- Davodani Microfinance Bank.
- Ecobank Nigeria Bank Plc.
- First City Monument Bank (FCMB).
- Fidelity Bank Plc.
- First Bank Nig Ltd.
- Guaranty Trust Bank (GTBank).
- HASAL Microfinance Bank.
- Infinity Microfinance Bank Ltd.
- La Fayette Microfinance Bank Limited
- LAPO Microfinance Bank Ltd.
- Mainstreet Microfinance Bank Ltd.
- Microcred Microfinance Bank Ltd.
- NPF Microfinance Bank Plc.
- Parallex Microfinance Bank.
- Seedvest Microfinance Bank.
- Stanbic IBTC Bank Plc.
- Sterling Bank Plc.
- Trust Microfinance Bank.
- UBA Plc.
- Union Bank of Nig Plc.
- Wema Bank Plc.
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Who Is Eligible For The Development Bank of Nigeria Loan?
According to the DBN, startups, businesses, MSMEs and entrepreneurs can apply to get loans from them. They do not give out quick loans or personal loans. However, you must be a customer of a Participating Financial Institution (PFI), who in turn disburses the loans on behalf of the development bank of Nigeria.
You can apply for the DBN loan if you meet the criteria and requirements. The following are the requirements for getting the DBN loan:
- Applicants must have an official government identification such as a National ID Card, Driver’s License, Voter’s Card etc.
- Applicants should produce the Certificate of Incorporation of their businesses (CAC Business Certification).
- Applicants and MSMEs (including startups and existing) must be involved in productive businesses and enterprises.
- Applicants and MSMEs (including startups and existing) must be customers of any of the Participating Financial Institutions (PFIs).
- Applicants must produce a Bank Guarantee.
- Applicants must present debenture on assets of their business or company.
How To Get A Loan From DBN
As an applicant, you must adhere to the following things for you to get the development bank of Nigeria loan.
- You must apply through any of the Participating Financial Institution. These financial institutions are the intermediaries or channels through which you can get the DBN loan.
- Pay a visit to the financial institution and declare your interest for the DBN loan.
- Your loan application will be processed and accessed. The bank examines your loan application and the purpose of the loan.
- For critical assessment and evaluation, your application gets forwarded to the Development Bank of Nigeria (DBN), who reserves the right to approve or decline your loan application.
- If your loan meets the criteria, requirements and conditions of the DBN, it will be approved.
- Upon approval, the DBN disburses your loan to you through the bank.
Most importantly, you must have an active bank account with any of the Participating Financial Institutions (PFIs). In other words, your loan application will be rejected if you are not a customer of the financial institution.
The DBN loans have a longer tenure than the loans obtained from commercial banks. They have a flexible repayment tenure. The DB grants loans with a tenure of up to 10 years (which includes a moratorium period of 18 months).
Also, they offer flexible interest rates to borrowers. The interest rates of the Development Bank of Nigeria is favourable compared to those of commercial banks. The interest rate of the DBN loan is determined based on the loan tenure and reference to the market rates.
- High loan amounts.
- Low interest rate.
- Offers loan-term loans.
- Flexible repayment tenure.
- Loans are disbursed through financial institutions.
- No quick loans.
- Requires lots of documentation and paperwork.
- Email Address: [email protected]
- Phone number: +234-9-904-0000, +234-811-3841-699, 0700-0225-5326.
- Abuja Office: The Clan Place, Plot 1386A Tigris Crescent, Maitama.
- Phone: +234-9-904-0000, +234-811-3841-699
- Lagos Office: Plot 952/953 Idejo Street, Victoria Island.
- Phone: +234-1-906-4000
In summary, this article provided you with information about the DBN loan. This loan has proven to be instrumental in providing funding for small businesses in Nigeria.
If you are looking for where to get funding for your business, you can consider getting a loan from the development bank of Nigeria.