The Development Bank of Nigeria (DBN) has launched three new products to help fulfill their mandate of addressing pressing needs and challenges of small businesses in the country. The new products are channeled towards making financial windows accessible to smallholder businesses.
The products are the Finance to Finance (F2F) product; the Non-Interest Banking (NIB) product; and the Long-Term product which would be accessed through DBN’s Participating Financial Institutions (PFIs).
It is worthy of note that the “Development Bank of Nigeria exists to alleviate financing constraints faced by Micro, Small and Medium Scale Enterprises (MSMEs) in Nigeria.”
According to the Leadership, “The DBN Finance to Finance (F2F) product, is especially designed for financial institutions (FIs) that lend to MSMEs through the likes of the microfinance banks, microfinance institutions, financial NGOs, cooperatives, fintech companies and other non-bank financial institutions. Through this product, which has a tenor of up to seven years, the DBN makes funds available to FIs who are unable to receive funding directly from DBN to disburse to their MSME customers. This way DBN is able to expand its reach to the MSMEs.
“The FIs who will qualify for this product would be expected to have active MSME portfolios and demonstrate a commitment to lend the funds to the target MSMEs.
The second offering, the Non-Interest Banking product, is developed for applicable participating financial institutions (PFIs) for on-lending to their MSME customers under the non-interest banking window. The fund, which is in support of the PFIs’ funding to their MSME customers, is a demonstration of the DBN’s commitment to increasing the availability of its funding to all MSMEs across the country. The product,” the Leadership concluded.
DailyTrust has it that, “According to a statement from the bank, the F2F is for lending to MSMEs through microfinance banks, cooperatives among others with seven years repayment tenor.
The NIB will help PFIs to lend to their MSME customers without interest; thereby supporting the needs of MSMEs who do not do interest loans. It has up to five years repayment period for a loan.
The long-term finance product has up to 10 years repayment period and could be obtained by MSMEs through PFIs.
The bank said the structure of the fund is flexible and can be easily adapted to suit the PFIs’ peculiar needs and finance structure.”
Explaining the NIB, techeconomy.ng, an online media publication, said that, “The second offering, the Non-Interest Banking product, is developed for applicable participating financial institutions (PFIs) for on-lending to their MSME customers under the non-interest banking window.”
The publication also said, concerning the F2F, that, “the … product, is especially designed for financial institutions (FIs) that lend to MSMEs through the likes of the microfinance banks, microfinance institutions, financial NGOs, cooperatives, fintech companies and other non-bank financial institutions.”
It is left for Nigerians to see how accessible these funds can be to the numerous MSMEs scouting for funds everywhere. The DBN, therefore, has the onerous task of making sure that these funds are released on time to qualified businesses, used for the primary intentions, are accessible to all applicants who meet guiding criteria without much delay, and that the process is transparent from A-Z.
Azuka Edokobi is a Writer , a Farmer, a Supply Chain Expert and an Entrepreneur
