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How To Get Loan From Development Bank Of Nigeria And Grow Your Business

How to get Loan

This article explains how to get loan from Development Bank of Nigeria. According to Development Bank of Nigeria, “there are 37 million MSMEs contributing to over 50% of Nigeria’s GDP. However, less than 5% of these businesses have access to credit in the financial system.”

See Also: Top 10 Mobile Loan Apps in Nigeria where employees and entrepreneurs can access loans.

In truth, at every stage in a business growth, capital is required. You need capital to start and grow your business. Lack of capital has killed many business ideas and has stopped many people from kick starting their businesses.

Start Your Business in 30 Days Even If You Don't Have An Idea
Start Your Business in 30 Days Even If You Don’t Have An Idea

This is very harmful to the development of our economy. To curb the lack of access to capital for small and medium businesses, The Development Bank of Nigeria (DBN) was conceived by the Federal Government of Nigeria (FGN) in collaboration with global development partners.

See Also: 14 sources of business funding opportunities for entrepreneurs in Nigeria

What Is A Development Bank

A Development Bank is a bank that provides risk capital for economic development of projects in a country. They are often owned by the federal government and provides funds for projects that will normally not get funding from commercial lenders.

In this article, we will discuss the Development Bank of Nigeria and one of Nigeria’s oldest, largest and most successful development financing institution- Bank Of Industry (BOI). We will also highlight how a small business can access loans from these institutions.

See Also: Top 10 Accounting Softwares For Small And Medium Businesses In 2019

Development Bank Of Nigeria

Development Bank of Nigeria began operations in 2017. The bank helps Micro, Small and Medium businesses in Nigeria to alleviate the challenge of raising funds to start or grow their businesses. So far, the bank has
impacted 95,000 MSMEs and N100,000,000,000 has been disbursed.

Basically, all MSMEs (startup or existing) involved in productive enterprises are eligible for DBN Loan. But, they must have accounts with Participating Financial Institutions (PFIs).

Development Bank of Nigeria loan can only be accessed through PFIs, which include Microfinance Banks, Commercial Banks, Development Finance Institutions (DFIs) and other financial institutions.

See Also: 12 Best crowdfunding sites to fund your business or product in Nigeria

Steps Involved In Getting DBN Loan

i. Visit Your Bank

There are several banks in Nigeria but not all of them are Participating Financial Institutions (PFIs) with DBN. So, you need to check the list of participating banks to open an account with.

See Also: Young entrepreneurs in Nigeria across different industries and their entrepreneurial journey.

Find below the participating banks, the contact persons and their email address:

Access Bank PlcOnyinyechi.Uba@ACCESSBANKPLC.com,
Ecobank Nigeria Bank PlcLAWAL Theresa – TOLAWAL@ecobank.com,
Fidelity Bank PlcOsaigbovo Omorogbe – osaigbovo.omorogbe@fidelitybank.ng,
FCMB LtdOluremi Agboola – Oluremi.Agboola@fcmb.com,
Stanbic IBTC Bank PlcDavid.Adebayo@stanbicibtc.com,
Sterling Bank PlcFatai.Jelili@Sterlingbankng.com,
UBA PlcAdegoke Bayo – bayo.adegoke@ubagroup.com,
Union Bank of Nig Plcaoordia@unionbankng.com,
Wema Bank PlcOlolade.Adekunle@wemabank.com,
AB Microfinance Bank Nigeria Ltd Oladapo.Ikupolati@ab-mfbnigeria.com,
Addosser Microfinance Bank Olusola Howells – howells.olusola@addosser.com,
Baobab Microfinance Bank Achenyo Oyibo – aoyibo@baobab.bz,
Bosak Microfinance Bank Toyin Peters – toyinpeters@bosakmfb.com,  teepeeters@gmail.com,
HASAL Microfinance Bank ruskiyat@hasalmfb.com,
Infinity Microfinance Bank Ltd Oludotun Adewunmi – g.adewunmi@infinitymfb.com,
LAPO Microfinance Bank LtdEfosa Aigbe – efosa.aigbe@lapo-nigeria.org,
Mainstreet Microfinance Bank LtdAdegoke E. Adegbami – aadegbami@mainstreetmfb.com,
midris@mainstreetmfb.com,  midris@mainstreetbankmfb.com
Microcred Microfinance Bank LtdOmar Niaz – oniaz@microcred.com
NPF Microfinance Bank PlcJude Ohanehi – jeco0072000@yahoo.co.uk,  JOHANEHI@npfmicrofinancebank.com,
Parallex Microfinance Bankabimbola.akande@parallexbank.com,
Seedvest Microfinance BankKehinde Oyeleke – kehinde.oyeleke@seedvestgroup.com,  oyelek@yahoo.com,
Accion Microfinance Bank Limitedtjoda@accionmfb.com,
La Fayette Microfinance Bank Limitedeodetayo@advans-lfmfb.com
Davodani Microfinance Bankjohne.ologe@davodanimfb.com,
Trust Microfinance Banktrustmfb@yahoo.com,
Go from idea to starting your business in 30 days
Go from idea to starting your business in 30 days

ii. Bank Verification

The next step is for the bank to appraise the business and purpose of loan. If the appraisal is favorable, the bank will then apply on your behalf to DBN for funding.

See Also: 15 Online invoicing software for entrepreneurs and businesses in Nigeria

iii. Disbursement

If DBN approves the loan, DBN will disburse to the bank for on-lending to the end borrower.

How To Repay DBN Loans

Interestingly, DBN loan is very flexible to repay. You have up to 10 years to repay the loan. Apart from that, you have 18 months grace period. This means that after receiving the loan, you are not under pressure to repay the loan for the first 18 months.

Another great news is that the interest rates are on a full market conforming and financially sustainable basis.

See Also: How to get Tax Identification Number (TIN) and open a bank account for your business

Bank Of Industry (BOI)

The Bank of Industry Limited (BOI) is Nigeria’s most successful development financing institution. It was reconstructed in 2001 out of the Nigerian Industrial Development Bank (NIDB) Limited. NIDB was incorporated in 1964 and started operation with authorised share capital of 2 Million (GBP) in 1964.

BOI provide access to funds for startups, SMEs, and large enterprises. They facilitate the entire process right from pre-loan application.

The Bank works together with local and international development finance institutions and commercial banks to provide funding for key capital projects.

See Also: Ways to acquire customers for your business and make them stay.

Things To Know Before Applying For BOI Loans

BOI provides facilities at tenors that range from 12 to 60 months and above. The bank provides funds mostly for the manufacturing sector and understand that the industry takes time to return profit on investment. So, the bank structures its loan tenors to accommodate this incubation period. Moratorium periods are incorporated into the loan tenors to ease repayment concerns.

See Also: 100 Profitable business ideas for aspiring entrepreneurs and investors to start now.

Bank Of Industry partnered with key local and international fund partners through matching fund schemes, where the Bank matches the funds brought to the table by the fund partner. 17 state governments in Nigeria, the Dangote Foundation, the Central Bank of Nigeria and others are some fund partners whose funds the Bank manages.

The bank offers mostly equity financing as it is a better option to ensure sustainability of businesses. Also, they manage key projects of the Federal Government that provide equity financing including the YouWin Programme.

See Also: Digital marketing channels for small businesses to explore in Nigeria.

The bank supports projects with potential development impact. The industries selected must meet the following criteria:

  • working on projects that use largely domestic raw materials and add to industrial output
  • Projects that can convert Nigeria’s comparative advantage into competitive ones and promote the expansion of exports.
  • Projects which are environmentally friendly, technically feasible, commercially viable and economically desirable.

For more on eligibility criteria, visit BOI.

Requirements For BOI Loans

The requirements vary based on the type of business applying for a loan. The pre and post documents needed differ depending on the type of enterprise applying. The enterprises are grouped into micro enterprise, small enterprises and large enterprises.

See Also: Business funding opportunities for women owned businesses in Nigeria.

Some of the documentation include:

Pre-approval documentation

  • Application letter on letterhead paper
  • Company profile which include: company background, certificate of incorporation and other documents from CAC, profile of directors, management and technical team, means of identification (National ID or International Passport or Drivers Licence or Permanent Voter’s card, BVN of company signatories
  • Comprehensive bankable business plan
  • Collateral documents
  • Legal documents
  • Financial documents

See Also: Top 20 business blogs in Nigeria business owners should follow

Post-approval documentations

  • Acceptance of offer
  • Board resolution accepting facility
  • 4 Passport photographs of each director
  • Submission of bank guarantee (as collateral
  • Most recent annual returns
  • 3 Years tax clearance of company and directors
  • Evidence of appointment of company secretary
  • Originals of title of property (C of O, Deed of Assignment etc)

See Also: Benefits of registering your business with Corporate Affairs Commission (CAC)

How To Apply For Bank Of Industry Loan

You can apply for BOI loan by visiting their nearest office or online. Ensure you are eligible to apply, then go through the requirements and have all your documents ready including your business plan before applying.

Follow the steps below to apply online:

  1. Log on to https://www/boi.ng/apply/
  2. Click ‘Register’
  3. Follow other steps as required

You will be given an application tracking ID when you submit your loan application. With that, you can check your application status. To check, just insert your application tracking ID in the search box.

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