Banking
DBN Introduces Products for Financing MSMEs
By Aduragbemi Omiyale
Three new products aimed to provide the much-needed access to financing window to micro, small and medium scale enterprises (MSMEs) in Nigeria through participating financial institutions (PFIs) have been introduced by the Development Bank of Nigeria (DBN).
The merchandises launched by the federal government’s development banking institution are the DBN finance to finance (F2F) product, the DBN non-interest banking product and the DBN long-term product.
All these products are meant to cover all aspects of the MSMEs sector irrespective of location, industry or business cycle. They are, however, meant for those MSMEs with less than 250 employees, an asset base of less than N1.125 billion and an annual turnover of less than N950 million.
A statement made available to Business Post disclosed that the maximum loan size disbursable to any of the qualifying MSMEs is N200 million.
The lender explained that the DBN F2F is specially designed for financial institutions (FIs) that lend to MSMEs through the likes of 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, the 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.
For the DBN non-interest banking product, it was developed for applicable 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, which is also aimed at promoting financial inclusion in the country, is available to all non-interest banks as well as other financial institutions who have non-interest banking products and wish to utilize DBN funds to deploy non-interest banking loans to their MSME customers for a tenor of up to five years.
The third product, according to the statement, is a loan product provided to PFIs to support their long-term lending to MSMEs for a period of up to 10 years.
The structure of the fund is flexible and can be easily adapted to suit the PFIs’ peculiar needs and finance structure.
Any PFI can request for this facility to cater for the long-term finance needs of its MSME customers where there are tenor mismatches between available funding and customers funding requirements.
The DBN noted that it expects these products to further address the existing access to finance challenges facing MSMEs in the country, which has been exacerbated by the effects of the coronavirus disease (COVID-19) pandemic.
Prior to the outbreak of the COVID-19 pandemic, the funding gap in the MSMEs sector in Nigeria was a whopping N48 trillion, according to the Governor of Central Bank of Nigeria (CBN), Mr Godwin Emefiele and this spurred the DBN to look for ways to bridge this gap in line with its strategic mandate.
These products could not have come at a better time when both the global and local economies have been battered by the effects of the COVID-19 pandemic. Nigeria, just like other countries of the world, has had its fair share of the pandemic and its effects, leading the country into a bad economic depression – the worst since the 1980s and the second since 2015.
The lockdown led to the closure of many businesses, mostly the micro, small and medium-scale enterprises (MSMEs), in the country. Those who survived or surviving are struggling to get on their feet once again as they are besieged with challenges of access to finance.
The DBN, which commenced operations in 2017, has between 2018 and 2020, disbursed N323 billion to over 136,000 MSMEs across the six geopolitical zones of the country through the PFIs.
With the creation of these products, the Bank is poised to increase its impact on the operations of the MSMEs in Nigeria.
By Modupe Gbadeyanka
About N3.6 trillion has been repaid to the Central Bank of Nigeria (CBN) by the Asset Management Corporation of Nigeria (AMCON) since its inception in 2010.
This information was revealed by the chief executive of AMCON, Mr Gbenga Alade, during a media parley to update the press on the activities of the agency.
Mr Alade said at the moment, the organisation still owes the central bank about N3 trillion for toxic assets of banks in the country.
He praised the organisation for its asset recovery drive, stressing that when compared with others across the world, Nigeria has done well.
“It is important to stress that the corporation has done tremendously well, especially when compared to other notable government-owned Asset Management Corporations around the world.
“Based on the balance at purchase, AMCON outperformed other Asset Management Corporations all over the world by achieving over 87 per cent in recoveries despite the unique challenges associated with debt recovery in Nigeria.
“The Malaysian Danaharta, which is adjudged one of the best performing Asset Management Corporation’s, only achieved 58 per cent. The Chinese Asset Management Corporation, despite its stricter laws, achieved just 33 per cent.
“Only the Korean Asset Management Corporation (KAMCO), South Korea, has achieved more recoveries than AMCON, with about 100 per cent. This was due to their brute force with which they chased the obligors.
“Despite KAMCO’s recovery records, the agency is still operational to date with slight realignments in its mandate.
“Other noted Asset Management Corporations that have transitioned into a perpetual institution of the various governments include, China Asset Management Company, Federal Deposit Insurance Corporation (FDIC) USA, and KFW Germany.
“So, gentlemen, without sounding immodest, AMCON has done well, and we will not relent until all the outstanding debts are fully realized,” Mr Alade stated.
On the financial performance of AMCON, he said last year, the firm posted a revenue of N156.25 billion and operating expenses of N29.04 billion, while for the 2025 fiscal year should be a revenue of N215.15 billion and operating expenses of N29.06 billion.
By Modupe Gbadeyanka
One of the non-interest banks in Nigeria, The Alternative Bank (AltBank), has opened a new branch in Effurun, Delta State.
The new office will serve the Edo-Delta region and provide purposeful banking and real financial empowerment for individuals, entrepreneurs, and businesses, a statement from the firm stated.
The lender disclosed that the Effurun branch is a bold move in its mission to reshape banking in Nigeria.
The launch was graced by key dignitaries, including the Ovie of Uvwie Kingdom, Emmanuel Ekemejewa Sideso Abe I; the Chairman of Uvwie Local Government, Anthony O. Ofoni, represented his vice, Andrew Agagbo; and the Special Adviser to the Governor of Delta State on Community Development, Mr Ernest Airoboyi; amongst others.
The Divisional Head for South at The Alternative Bank, Mr Chukwuemeka Agada, emphasised the institution’s commitment to Warri and its surrounding communities.
“By establishing a presence here, we are initiating a transformation in the way banking serves the people of Delta. Our purpose-driven approach ensures that customers’ financial goals are not just met but exceeded,” he stated.
“This branch represents our pledge to empower Warri’s dynamic businesses and families, providing them with the tools to grow without compromise,” Mr Agada added.
“We understand the heartbeat of this community, and we are excited to integrate our bank into the fabric of this dynamic region,” he stated further.
On his part, the representative of the Ovie, Mr Samuel Eshenake, challenged the bank to facilitate development and employment within the Effurun community.
The Regional Head for Edo/Delta at The Alternative Bank, Mr Akanni Owolabi, embraced this challenge, pledging that the bank will work sustainably to drive local commerce.
“At The Alternative Bank, we are committed to being an active partner in the development of Effurun. We see this branch as a catalyst for creating opportunities, driving employment, and supporting the growth of local businesses.
“Our mission is to empower this community, ensuring that every step forward is one of progress, prosperity, and shared success.”
By Aduragbemi Omiyale
A partnership aimed to enable seamless, real-time and secure transactions for cardholders across Africa and the rest of the world has been entered into by Payattitude and PAPSSCARD, the card scheme initiative of the Pan-African Payment & Settlement System (PAPSS).
The collaboration will allow Payattitude cards issued by banks and other deposit-taking institutions to be co-branded with PAPSSCARD, Discover, Diners and Pulse for acceptance across their networks in Nigeria, Africa and worldwide.
As an initiative of the African Export-Import Bank (Afreximbank) and a key financial infrastructure supporting the African Continental Free Trade Area (AfCFTA), the PAPSSCARD scheme will facilitate instant cross-border payments in local currencies.
“This partnership reflects our commitment to cross-enterprise alliances and enabling inclusive, efficient, and borderless payments across Africa and the world
“With Payattitude, Nigerian cardholders and financial institutions can now enjoy the benefits of a Nigerian card that can be used worldwide,” a director at Payattitude, Dr Agada Apochi, said.
The acting chief executive of PAPSSCARD, Mr John Bosco Sebabi, said the aim is “to connect African payment ecosystems, reduce the cost and inefficiencies of cross-border payments, and strengthen African sovereignty over payments infrastructure.
“Collaborating with Payattitude, a key innovator in Nigeria’s payment space, represents a significant step towards a more unified African payment landscape.”
The chief executive of PAPSS, Mr Mike Ogbalu, said, “By bringing together PAPSSCARD’s robust cross-border payment capabilities with Payattitude’s leadership in the Nigerian digital payments, we are taking tangible steps toward building a single African market where individuals and businesses can transact easily and securely, both within and beyond Africa.”
Payattitude is the first-in-kind Nigerian Payment Scheme to pioneer multibank App and USSD Code *569#.
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