Jonathan Launches Development Bank of Nigeria

President Goodluck Jonathan on Monday officially launched the Development Bank of Nigeria (DBN).

Though Jonathan observed that small and medium enterprises had always been the backbone of the nation’s economy, he however said the sector never had the opportunity of accessing cheap funds for its development.

According to the president, there exists  over 17 million Micro, Small and Medium Enterprises (MSMEs) across the country which employ over 32 million people while contributing over 45 per cent to the Gross Domestic Product (GDP).

He stressed that existing developmental institutions in the country included the Bank of Industry (BoI) and other commercial banks which could not satisfy the funding needs of the MSMEs, hence the establishment of the DBN.

The president spoke at the launch held at the Banquet Hall, Presidential Villa.

“Access to long term finance has been a challenge for the MSMEs. Most MSMEs cannot get long term funds from banks and other financial institutions, forcing them to spend on personal savings, friends and family for loans.

“These loans are typically short term and come at a high interest rate, thereby stemming the growth of these businesses,” Jonathan said.

The president, however, seized the opportunity to launch his campaign handbook titled; ‘Jonathan’s Next Four Years,’ encapsulating his visions for the country should he be re-elected.

The Coordinator for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, explained that the establishment of the bank was for a robust finance backing for small and medium enterprises.

According to her, the wholesale developmental institution plans to offer loans to at least 20,000 beneficiaries in the first one year of its operations and is billed to start business in the next nine months.

The Federal Executive Council (FEC) recently approved a multi-donor credits from the International Bank for Reconstruction and Development of the World Bank, Africa Development Bank, Germany and French Development Agency in the sums of $500 million, $450 million, $200 million and $130 million for the establishment of the DBN.

Jonathan Launches Development Bank of Nigeria

African Export-Import Bank supports firms with $48 million

The African Export-Import Bank says it has provided $48 million lines of credit to African factoring companies in the last two years.

This was disclosed in a statement by Benedict Oramah, Afreximbank’s executive vice president in charge of Business Development and Corporate Banking, on Thursday in Lagos.

Factoring is not a loan but a cash-management tool of choice for many companies, and is one of the oldest forms of business financing.

Mr. Oramah, who spoke at a symposium on factoring in Africa in Cairo, was quoted as saying that the support was to give liquidity and payment risk protection in the companies’ factoring activities.

The two-day symposium was organised by the Egyptian Factoring Association, the Financial Services Institute and the International Factors Group.

According to him, the amount comprised $23 million granted to factors located in Mauritania and $25 million to several others based in Senegal.

He announced that Afreximbank currently had factoring lines totalling $50 million under assessment for institutions in Burkina Faso, Kenya, Egypt, Botswana, Rwanda, and Zimbabwe.

Mr. Oramah said that Afreximbank had supported the development of factoring in Africa through educational events and fostering the creation of facilitative infrastructure.

He said that Afreximbank would soon introduce a co-branded factoring development product called AfriFactor, to reduce costs incurred by African factors in setting up factoring business platforms.

“Besides, AfriFactor will address challenges around the lack of expertise in back-office and receivables management,” he said. “It will provide advisory services to African financial institutions seeking to commence or enhance their factoring businesses, and provide support in such areas as establishing factoring businesses, information technology and operations platforms.”

Mr. Oramah added that Afreximbank was also working with the African Development Bank’s Thematic Fund for Private Sector Assistance to support factoring companies in Africa.

According to him, the partnership uses FAPA grants that target innovative programmes for small and micro-scale enterprises.

He said that a grant has been pre-approved for technical capacity building, drafting of a model law, and for advocacy, including training, workshops and conferences.

Mr. Oramah said Afreximbank had organised seminars, trainings and workshops across Africa, targeting bank officials, lawmakers and regulators, to encourage interest in factoring as an alternative trade finance instrument for companies.

Afreximbank is a foremost Pan-African multilateral financial institution devoted to financing and promoting intra-and extra-African trade.

African Export-Import Bank supports firms with $48 million