Mr. Tony Okpanachi, Managing Director, Development Bank of Nigeria (DBN)

By AYOOLA OLAOLUWA

After early teething challenges that threatened to overwhelm it, the Development Bank of Nigeria (DBN) Plc seems to have overcome all obstacles on its path to success by delivering on its mission to sustain the nation’s economic growth, just three years after it began operation.

When it was established in March 2015 by the former President Goodluck Jonathan-led administration, to alleviate financing constraints faced by MSMEs and small corporates operating in the country, hitherto cash-strapped entrepreneurs breathed a sigh of relief, finally seeing the answer to their age-long prayers.

However, their dreams quickly evaporated as several hiccups and obstacles forestalled the actual take-off of the bank. It took two additional years before the bank could open its doors in 2017 to expectant customers.

Despite the initial hiccups, the bank has been able to achieve landmark successes to the delight of shareholders and stakeholders. Recently, it marked its three years in existence with its first virtual 3rd Annual General Meeting (AGM), where it rolled out its achievements, particularly in the last year.

While presenting the scorecard on the bank’s activities and contribution to the Nigerian economy to the public, its Managing Director, Tony Okpanachi, said the institution, working through its Participating Financial Institutions (PFIs) facilitated an increase in MSME revenue, as well as assets.

According to Okpanachi, the bank impacted the Nigerian Micro, Small, and Medium Enterprises with the disbursement of over N100 billion to over 100,000 MSMEs, cumulatively resulting in additional job creation of 3,192 jobs in the financial year ended December 2019.

“Through our 27 Participating Financial Institutions, over N100 billion was disbursed last year, impacting cumulatively over 100,000 MSMEs. So far, 3,192 jobs have been created leading to an increase of 10% in MSMEs revenue and a 6.8% increase in the value of their land assets.

“Also, 52% of loans disbursed in 2019 were to youths and women-owned businesses. This is in our bid to promote economic empowerment and gender equality,” he said.

The DBN, he further disclosed, set up Impact Credit Guarantee Company Limited, a subsidiary aimed at de-risking the MSME sector. The credit guarantee company, according to the visioners, is to share risks with the PFIs to encourage them to lend to the vital sector of the economy.

Apart from these milestones, the DBN also delivered capacity building programs for MSMEs across the six geopolitical zones of the federation, provision of technical assistance to PFIs, as well as capacity building programs for MSMEs to encourage the uptake of the DBN funds by PFIs for lending.

To further consolidate on the mandate of the bank, its management is currently expanding its distribution network to include other non-banking financial institutions, granting concessions to PFIs as well as making SME lending risk free through its newly established subsidiary in a move aimed at increasing participation.

“The bank is on the right trajectory by focusing its strategy on driving sustainable economic growth”, the CEO assured shareholders at the AGM.

Business Hallmark findings revealed that though the DBN provides long-term credit facilities and technical assistance to business owners to grow their businesses, it does not lend to them directly but through 27 licenced Participating Financial Institutions (PFIs), which include commercial banks, microfinance banks and development finance institutions.

It is to the credit of DBN’s management that the number of participating PFIs has grown to 27 in 2020 from just two in October 2017. While the bank has achieved so much within the little period of its existence, the success story of the bank will not be complete without mentioning the contribution of its management team, led by its 53-year old-year-old managing director, Tony Okpanach.

In the spate of just three years, the bank under Okpanachi has grown in leaps. As at May 2020, DBN had disbursed over N100billion to over 100,000 MSMEs despite the myriads of institutional, logistical and capacity challenges in the country. The fund is available to all Nigerian small and medium-sized businesses which could only apply through participating financial institutions.

To get a DBN loan, interested customers must first approach their banks, which must be one of the participating banks. The banks will then appraise their applications. If satisfied, the bank will then go ahead to apply on their behalf. If DBN eventuality approves the loan, it will disburse to the bank which will, in turn, give to the successful applicant.

To cap it up, the DBN loan repayment tenure is more flexible than that of commercial banks, as it offers a moratorium period of 18 months. The loan can be repaid throughout 10 years as approved by the intermediary financial institution. Interest rates are not flat but based on the assessment of risk factors of individual applications.

“Knowing that we take the risk of the financial institutions, we assess them and rate them; so that brings about the risk premium for each applicant”, the bank said.

The bank’s strength, however, lies in the area of risk management. It is on record that DBN has recorded zero Non-Performing Loans (NPLs) from inception till date. The loans are not sector-specific but cover all sectors of the economy. Interestingly, women and youth entrepreneurs accounted for 52% of the end-borrowers that benefitted from the bank loan schemes.

Despite the modest progress the bank has made under his leadership, Okpanachi refused to take full credit.

“It’s not about me; it’s about the mandate; it’s about the team, it’s about impact. We have been able to get this far by prioritizing values crucial to DBN’s success in building a high performing team and international best practices”, he declared.

The bank’s strong record of professionalism and effectiveness, BH findings revealed, also boosted the confidence of investors and stakeholders in the institution who contributed immensely to the successes achieved so far. The bank had in its first year of operations exceeded its projected performance of N30bn with a total loan disbursement of N31.36 billion to 35,000 Micro, Small and Medium Enterprises (MSMEs).

Spurred by the achievements attained in its first year of operations, the bank raised its disbursement target for 2019 to N70 billion, which it surpassed by N30bn. Despite this intimidating accomplishment, Okpanachi is not resting on his oars. While revealing the bank’s plans for the future, he said the institution is working diligently to achieve a disbursement level of about N389 billion by the end of 2023 when the bank would mark its fifth year of lending.

Though the target looks ambitious and boastful, analysts believe it could be achieved, giving the institution’s track record so far. In recognition of the bank’s professionalism, it has been recommended for various ISO certifications such as Information Security- ISO 27001; Business Continuity ISO 22301 and IT Service Management ISO 20000.

A highly experienced banker with over 26 years of experience, Okpanachi has served at the very top of both local and international financial institutions, including serving as the Deputy Managing Director of Ecobank Nigeria;  Managing Director, Ecobank Kenya; Cluster Managing Director for East Africa (comprising Kenya, Uganda, Tanzania, Burundi, Rwanda, South Sudan and Ethiopia).

He was also a former Managing Director of Ecobank Malawi and Regional Coordinator for Lagos and South West of Ecobank Nigeria.

The Development Bank of Nigeria was set up as a wholesale development finance institution (DFI) to provide sustainable financing through eligible Participating Financial Institutions (PFIs), who would, in turn, lend to end-borrowers – Micro, Small and Medium Enterprises (MSMEs), for the development of that segment.