The European Investment Bank and the African Development Bank have agreed to support the creation of the new Development Bank of Nigeria (DBN) to strengthen lending for business and agriculture investment in the country. The African Development Bank on Thursday announced that the European Investment Bank finalized a $20 million equity stake in the new financing institution, alongside their $50 million equity participation.
The Development Bank of Nigeria was created by the Federal Government of Nigeria to address financing challenges hindering private sector investment in the country. The Bank is called to play an important and catalytic role in providing funding and risk sharing facilities to micro, small and medium enterprises as well as small corporates. The DBN estimates that only 5% of the 37 million entrepreneurs and small businesses in Nigeria that contribute to 50% of GDP can access credit in the financial system.
Commenting on the support, Tony Okpanachi, Managing Director of the Development Bank of Nigeria said:
“The Development Bank of Nigeria will overcome the funding gap in the micro-, small- and medium-scale enterprises space and help businesses unlock opportunities across Nigeria. DBN’s ambition is strengthened by the financial and technical support of international partners, including the European Investment Bank and African Development Bank.”
Also commenting, the Ambassador Ketil Karlsen, Head of the European Union Delegation to Nigeria and the Economic Community of West African States (ECOWAS) said:
“The European Union is committed to supporting private-sector investment in Nigeria. The new backing for the Development Bank of Nigeria by both the European Investment Bank, the bank of the European Union and the African Development Bank, with 13 EU member state shareholders, will make a clear contribution to tackling the lack of access to credit by entrepreneurs and businesses across the country. With more investment, we hope to promote a vibrant economy and stimulate growth, employment and increase opportunities, especially for youth…”
Other international financial institutions including the World Bank, Germany’s KfW and the French Agence française de développement (AFD) will also support the new bank alongside backing from the Federal Government of Nigeria.