The Development Bank of Nigeria (DBN) has raised N23bn bond at 14.40 per cent due in 2028 for into small scale businesses.
According to the bank, the N23bn issued would be used to expand its capacity to provide funding for Micro, Small and Medium Enterprises (MSMEs) in facilitation of its main corporate goal.
The Managing Director DBN, Tony Okpanachi, stated that this was the bank’s first local raise since it began to raise funds.
Speaking at the signing ceremony in Lagos on Thursday, 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 financially sustainable basis.
The Executive Director and Chief Financial Officer 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 N20bn debut issuance under its N100bn medium-term note programme.
