FEC approves $1.3bn loan for Development Bank of Nigeria

 
FEDERAL Executive Council (FEC) has approved $1.3 billion of loans from international lenders to fund the newly licensed Development Bank of Nigeria.
The bank aims to support small businesses with loans of varying lengths at lower interest rates than are now available as Nigeria contends with its first recession in 25 years.
Speaking after FEC meeting held in Abuja, Minister of Finance, Mrs. Kemi Adeosun said the loan money is made up of $500 million from the World Bank, $450 million from the African Development Bank, $200 million from German state bank KfW and $130 million from France’s state development agency.
She said the loan facility is subject to approval by the National Assembly.
The finance ministry has previously said that 50 percent of the gross domestic product in Nigeria economy is made up of small companies.
The Central Bank of Nigeria had last week granted licence for the Development Bank of Nigeria (DBN).
In a letter to the Managing Director/Chief Executive Officer of DBN dated March 28, 2017, signed by the Deputy Governor of the CBN in charge of Financial System Stability, the approval was, however, made subject to meeting the minimum capital requirement of N100 billion, reconstitution of the Board of the bank and reviewing its organizational structure.
The DBN, was conceived in 2014 but its take-off had been fraught with delays. While reviving the process of the bank’s take off, Adeosun said the DBN will have access to US$1.3bn (N396.5 billion) which has been jointly provided by the World Bank (WB), KfW (German Development Bank), the African Development Bank (AfDB) and the Agence Française de Development (French Development Agency). The bank is also finalising agreements with the European Investment Bank (EIB).