DBN Raises N23 Billion Bond to Support Small Businesses in Nigeria

Ilesanmi AdekanbiJuly 14, 2023

1 minute read

The Development Bank of Nigeria (DBN) has raised N23 billion bond at 14.40 per cent due in 2028 for small scale businesses.

The bank said its core corporate objective is to use the N23 billion to expand its capacity to provide funding for Micro, Small and Medium Enterprises (MSMEs).

The Managing Director of DBN, Tony Okpanachi, while speaking at the signing ceremony on Thursday in Lagos, said that this was the bank’s first local raise since it began to raise funds.

Okpanachi said, “So we have mobilised capital from outside the shore of Nigeria. That was the first step.

“As an institution going forward, we will also be able to catalyse some fundraising within the economy itself to lend to the micro, small, and medium enterprises. We are expanding our funding base beyond the development partners we received funding from.

“Now we are raising funds locally because if you remember, the need of that segment in the economy is huge.”

DBN exists to alleviate financing constraints faced by MSMEs in Nigeria by providing financing, partial credit guarantees, and technical assistance to eligible financial intermediaries on a market-conforming and fully financially sustainable basis.

The Executive Director and Chief Financial Officer of DBN, Mrs Ijeoma Ozulumba, noted that about 20,000 small businesses were likely to benefit from this fund. She stated that the fund would help institutions have access to finance.

She added that the rates were affordable and that as the economy improved and interest rates moderated, it would also reflect on the instrument.

Ozulumba said further issuances would depend on the market conditions, the utilisation of available funds, and when shareholders and advisers gave a go-ahead.

DBN noted that its bond was over-subscribed as it set out to raise an initial N20 billion debut issuance under its N100 billion medium-term note programme.