DBN doles out N215.1bn loan to 136,000 SMEs

The Development Bank of Nigeria (DBN) has given out N215.1 billion loan to 136,000 Micro, Small and Medium Enterprises.
This is despite the ravaging effect of COVID-19 pandemic in 2020.
DBN, in a statement after Agusto and Co rated the bank ‘AAA’, said it will continue to “expand the scope of its operations, onboarding more Participating Financial Institutions (PFIs) and deepening credit penetration in the low end of the market”.
Particularly DBN will target “women entrepreneurs, who represent over 50 percent of the bank’s ultimate credit beneficiaries”.
According to DBN, the bank “doubled its loan portfolio to N215.1billion, leveraging its robust risk management practice in deepening credit penetration to over 136,000 MSMEs”.
Explaining how the bank was able to extend such volume of credit to MSMEs, DBN said: “has sustained an outstanding asset quality record of nil delinquency, unique fundamentals which attest to the efficacy of its credit creation model and overall risk management culture.
“Notably, the bank maintains a BASEL II capital ratio of 75.2 percent, several multiples of the minimum 10 percent regulatory requirement”.
DBN’s liquidity ratio hovered around 84 percent, compared to the 10 percent regulatory requirement, which means that DBN has the “capacity to sustain the pursuit of deepening credit penetration amongst MSMEs”.
Rating agency, Agusto and Co. has assigned AAA rating to Development Bank of Nigeria Plc.
In assigning the AAA rating Agusto described DBN as “a development finance institution of impeccable financial condition and overwhelming capacity to meet obligations as and when they fall due”.
Agusto highlighted “DBN’s good asset quality, good capitalization, good liquidity, and experienced management team as factors responsible for the positive rating”.
In its credit rating announcement, Agusto noted that DBN’s rating “takes into cognizance the support of the bank’s shareholders – the Ministry of Finance Incorporated, Nigeria Sovereign Investment Authority (NSIA), Africa Development Bank (AfDB) and the European Investment Bank (EIB)”.
AfDB and EIB Agusto said “are both rated ‘AAA’ by Standard and Poors, Moody’s, and Fitch Ratings. Aside from equity contribution, AfDB provides long-term borrowing, technical and business support to DBN”.
The rating Agusto added “also considers the support of other international development finance institutions such as the French Development Agency (AFD), KfW – the German Development Bank, and the World Bank, which provides funding and technical support, in addition to strengthening governance.”
Agusto observed that “despite the COVID-19 pandemic, DBN increased its financial support to Micro, Small and Medium Scale Enterprises (MSMEs) and small-sized corporates through participating financial institutions”. Notwithstanding the pandemic”.
Commenting on the rating action, the Managing Director/CEO, Development Bank of Nigeria, Mr. Tony Okpanachi said, the AAA rating “provides an objective opinion on the bank’s credibility and capacity in