Officials at the Development Bank of Nigeria say the institution could be disbursing ₦100 billion to small businesses in the country this year. As such, they’re expecting more loan applications from MSMEs in need of funding to scale their operations.
Starting in 2017, the DBN has given out loans exceeding N30 billion to over 35,000 businesses. It’s now moving to increase its reach by working with designated banks to grant more loans to entrepreneurs and companies that require them.
The DBN’s chief economist, Joseph Nnanna, explained at a lecture delivered at the University of Abuja, that the government-run institution aims to fill an SME financing gap which has seen only 31% of small businesses in the country obtain loans from commercial or microfinance banks.
“We are trying to achieve more financing for MSMEs because we believe they are the engine that grows any economy in any part of the world,” he said. According to him, the ultimate goal was to drive economic diversification by supporting the growth of a large variety of small scale enterprises.
Who Is Eligible for the Loan?
The DBN says all MSMEs in Nigeria can apply for its loans. The only stated eligibility criteria are that they be customers of a Participating Financial Institution (PFI); that is, any commercial bank, microfinance bank or development finance institution that disburses the loans on its behalf.
If you get the loan, you will have 10 years to pay it back. You could also have a moratorium on repayment of up to 18 months after taking the loan.
How to Get a Loan from the DBN
Here are the steps you should take to get a DBN loan.
- Visit any commercial bank, microfinance bank or Development Finance Institutions that’s been designated to distribute loans under this program, and tell them that you would like to access the DBN loan. A list of banks currently offering this loan and their contact details can be found here.
- The bank will examine your business and your stated purpose for applying for the loan. If they determine that it fits with their internal criteria, they will forward your request to the DBN.
- The DBN will approve the loan if it is satisfied that the request meets its conditions. If it grants the request, it will send the loan to the bank at which the request was made.
Click here to find out which banks you should visit to access this loan.
Featured image source: BrandCrunch Nigeria