At every single stage of a business, adequate capital is required to foster growth. Where capital isn’t available or inadequate, businesses die. This in return is really harmful for the development of the economy.
In a bid to curb the lack of access to required capital for small and medium businesses (SME), The DBN loan by the Development Bank of Nigeria was conceived. This idea was birthed by the Federal Government of Nigeria in a collaboration with development partners globally.
What Is A Development Bank?
A Development Bank is a bank that has been set up solely for the purpose of providing infrastructural facilities to aid the industrial growth of a nation. The financial assistance provided is open to both private and public sectors of the country.
The Development Bank of Nigeria (DBN)
The operations of the Development Bank of Nigeria began in the year 2017. The DBN provides financial assistance to SMEs in Nigeria. The purpose of the DBN loan is to ease the challenges business owners face in raising funds for their businesses.
What to Know About Accessing DBN Loan In Nigeria
For SMEs in Nigeria looking to access the DBN loan, here are some things about the loan you need to familiarize yourself with:
- The Development Bank of Nigeria does not give out loans directly to the public. DBN loan can only be accessed through all Participating Financial Institutions (PFI). These PFIs include development finance banks, commercial banks, and microfinance banks.
- The DBN loan in Nigeria can be repaid over a period of ten years based on approval by your financial institution.
- The DBN loan provides a flexible repayment plan for SMEs in Nigeria. It comes with a moratorium of 18 months, after which loan repayment can begin.
- To access the DBN loan, you have to visit your bank to indicate interest. In addition, your bank has to be eligible to access the loan.
How To get A DBN Loan in Nigeria
- Visit an eligible bank
While there are several banks in Nigeria, not all of them are eligible for the DBN loan in Nigeria. First, you have to check out for the list of eligible banks who are PFIs with DBN.
Below is a list of participating banks in Nigeria.
- Access Bank Plc
- Fidelity Bank Plc
- GTBank
- First Bank Nigeria Ltd
- Ecobank Plc
- FCMB Ltd
- Stanbic IBTC Banl Plc
- Union Bank Nig. Plc
- UBA Plc
- Addosser Microfinance Bank
- AB Microfinance Bank Nigeria Ltd
- Bosak Microfinance Bank
- Baobab Microfinance Bank
- Infinity Microfinance Bank
- HASAL Microfinance Bank
- LAPO Microfinance Bank
- Microcred Microfinance Bank
- Mainstreet Microfinance Bank8
- NPF Microfinance Bank Plc
- Seedvest Microfinance Bank
- Parllex Microfinance Bank
- Accion Microfinance Bank
- Trust Microfinance Bank
- La Fayette Microfinance Bank
- Davodani Microfinance Bank
- Bank Verification
After establishing a suitable bank, the next step is bank verification. The bank will carry out an appraisal of the business for which the DBN loan is being requested. Once the bank finds the appraisal favorable, an application will then be made on behalf of SMEs in Nigeria applying for the DBN loan.
- Disbursement of DBN loan
After the DBN loan has been applied for and approved by the DBN, the loan will then be disbursed to the bank for funding.
Who Is Eligible For A DBN Loan In Nigeria?
All SMEs in Nigeria involved in a productive enterprise are eligible to get a loan from the Development Bank of Nigeria. DBN provides a risk sharing guarantee via the Participating Financial Institutions. These institutions then go on to disburse funds to beneficiaries.
Before SMEs in Nigeria can be eligible for these funds, they must first be registered as customers with any of the approved Participating Financial Institutions.
Basic Requirements For Getting A DBN Loan in Nigeria
- A valid and official means of identification.
- A CAC certificate showing evidence of your company/business incorporation.
- Guarantee from your bank
- A debenture on your company’s asset.
DBN Loans Frequently Asked Questions
To know more about the DBN loan services below are frequently asked questions about the loan and answers.
- What makes DBN loan different from other loans in Nigeria?
The DBN loan for SMEs in Nigeria is explicitly targeted at small businesses, this is in a bid to ensure such businesses have all the required funding needed.
- What interest rate does DBN loan charge?
With the DBN, interest rates are flexible depending on the market rates and tenure.
- How long does it take to pay back the DBN loan?
This depends on the nature of the business and the purpose for which the loan was taken. Usually, you are provided with a moratorium period of up to 18 months and up to 10 years for repaying the loan.
- Can businesses borrow directly from the DBN?
No. the Development Bank of Nigeria does not give out loans directly to businesses. DBN channels loans through Participating Financial Institutions (PFI).
Accessing the DBN loan in Nigeria doesn’t have to be much of a heinous task once you meet up with all necessary requirement. If your business is on the list of SMEs in Nigeria in need of funding, then the DBN loan is a great option to consider.