According to the DBN, Nigeria has more than 37 million MSMEs but not up to 5% can access credit. When you consider this rate, it easy to see why many of these businesses pack up within a few years.

Capital is very important to running any business and credit is one of the chief ways to raise capital. Considering the role SMEs in Nigeria play in supporting the economy, the DBN was established to loans available to SMEs. The question now is how can you access a DBN loan?

About the DBN
Before we discuss how to access a DBN loan in Nigeria, let’s briefly discuss the DBN. DBN stands for the Development Bank of Nigeria and it is a financial institution established by the Federal Government of Nigeria. The FGN established this bank in conjunction with several development partners worldwide.

This financial institution has one key objective, alleviating the financial constraints that MSMEs in Nigeria face. They intend to achieve this by providing financing as well as partial credit. The DBN believes that SMEs in Nigeria suffer stunted growth because they lack access to equity, payment services, and credit.

Some of the products and services of the DBN include:

a. Wholesale lending

b. Capacity building

c. Partial credit risk guarantees

Click here to find out more about each of these products and services.

Who can access a DBN loan?
It is important to answer this question because not everyone can access a DBN loan in Nigeria. These loans are designed to help SMEs in Nigeria majorly. So for starters, all MSMEs can access these loans. It doesn’t matter if they are existing or at the startup stage, as long as they carry out productive activities.

The DBN provides risk-sharing guarantees and funding via Participating Financial Institutions or PFIs. These PFIs in turn lend the funds to eligible loan applicants. This means that individuals or businesses cannot submit loan applications to the DBN directly.

Since you can only access a DBN loan through PFIs, what bodies fall under this category?

PFIs include but are not restricted to the following:

a. Commercial banks

b. Microfinance banks

c. Development Finance Institutions (DFIs)

A couple of other financial bodies also fall into this category. You must be interested in the loan tenure for loans from this financial institution. Well, the loan tenure is quite flexible. That should be great news if you are planning to get a loan from the DBN.

First, you can enjoy a moratorium of up to 18 months. Then you can pay up the loan over about 10 years. A Moratorium period is a time after getting a loan that the borrower isn’t required to make any repayments. It extends to a few months after the loan was disbursed depending on the body providing the loan.

The DBN believes that within these 18 months, the business should have gained some ground. Interest rates are also not over-burdening for SMEs. They are financially sustainable and market-conforming.

Getting a DBN Loan
In this section, we will share with you the steps you should take to access a DBN loan in Nigeria. They include:

Step 1 – Visit a Participating Financial Institution. This can be your commercial bank, Development Finance Institution, or Microfinance Bank. When you do, you can express your intention to access a loan.

Step 2 – Submit your loan application along with the necessary documents.

Step 3 – The PFI assesses the loan application. This includes appraising the business you run and the purpose of the loan. If it deems it fit, the PFI applies for funding from the DBN.

Step 4 – The DBN further appraises the loan application and the business. If it sees the application as worthy for a loan, it makes the funds available to the PFI. The PFI then makes the loan available to the qualified borrower.

Click here to get a full list of the qualified PFIs from which you can access a DBN loan in Nigeria.

Continue reading at... https://www.sme360.ng/2020/07/02/how-to-get-a-dbn-loan-in-nigeria/

Forget this matter, startups can't access the loan. This is one of the reasons i dislike the policies makers of Nigeria. They don't think smart. What about startups

jayaim:
Forget this matter, startups can't access the loan. This is one of the reasons i dislike the policies makers of Nigeria. They don't think smart. What about startups

Giving loans to startups is a very big risk...you have above 90% chance of loosing your money just because you want to be a nice guy!