DLM Capital: Providing financial solutions to economic, social problems that impact everyday lives
With a mission to constantly push the frontiers through innovation, DLM Capital, a development investment bank has consistently offered financial services and products to key sectors of the Nigerian economy to improve the well-being of Africa’s most populous nation.
Riding on its household name of the parent- DLM Capital Group, the various subsidiaries of the Lagos-based company weathered the storm that arose in the year to deliver on its core business of providing financial solutions to Nigerians and the Africa continent at large.
DLM has a motivating factor to mobilize international and domestic capital to support Africa’s economic and social development.
Through its subsidiaries in investment banking, trust services, asset management, securities trading, forex trading and microcredit, the group identified opportunities where it looks to harmonise its expertise across the various business units to effectively mobilise capital to enable it to provide services and products tailored to solve many funding challenges identified within key sectors of the economy.
In this year, DLM Capital successfully designed the first Multi-Issuer Private Bonds Programme in Nigeria through which 12 mid-sized firms have been provided with funding, in addition to other typical financial services to corporates, and government institutions.
Key sectors like agriculture, education, consumer finance, fintech, transportation, housing, and infrastructure have benefited from the services offered by DLM.
According to the development investment bank, its success story is tied to its responsive executive management that has remained supportive of its vision.
“My goal was to create a sustainable institution and also, to be able to provide my quota to the country’s development. Having several people today that are employed by the group makes me happy and I know that the number will grow exponentially over the coming years,” Sonnie Babatunde Ayere, Group Managing Director/CEO of DLM Capital, said.
Below are some of the milestones achieved by the subsidiaries of the development investment bank in 2021.
Like most industries, the current economic reality which is greatly influenced by the Covid-19 pandemic had a negative impact on the financial services sector. However, DLM Advisory, which is strategically positioned to provide innovative solutions in line with its developmental mandate, has performed better than most of its peers within the industry, according to the advisory subsidiary arm of DLM.
“Our highlight for the year is the extent of financial solutions we provided to our various clients especially within FinTech and Innovation,” the team at the subsidiary said.
According to the advisory arm, DLM has gone beyond its competitors to carve a niche in structured finance, which is its competitive advantage in the industry. “The institution thrived in the last year majorly due to its ability to provide clients with bespoke solutions suited to the economic times.”
In the course of this year, DLM Advisory structured and registered the first commodities backed commercial papers programme in the domestic debt market with the launch of the N50billion Commodities Funding Programme which is designed to provide commodities, buyers, with short term local currency funding with tenors of up to 270 days, for bulk purchases of agricultural commodities.
The programme provides a reliable and continuous source of matched funding to off-takers of agricultural produce and enables them to manage price volatility. Not only does the programme release liquidity to farmers to restock for the new planting season, it also enables them secure bulk off-take, and eliminates losses due to inadequate storage of farm produce.
DLM retained the 2021 West Africa’s best-structured finance and securitization team award by Capital Finance International (CFI).
“The award goes to show the recognition of our efforts and contributions to the development of the capital market and we are delighted to be at the forefront of structured products in West Africa,” the company said.
DLM believes that its expertise in structured finance has a far-reaching effect in helping its clients achieve their financing objectives. As we build proficiency to expand into other African markets, we are open to providing our services, including using securitization as a finance tool, across the African continent.
DLM Trust Company
Some of the key achievements by the trustee subsidiary of DLM Capital in 2021 include payment of dividends to investors, increased transactions, reduction of expenses and a zero regulatory and statutory infraction record.
“Our first and foremost achievement for the year 2021 was ensuring that all the Investors/Bondholders/Noteholders whose interest we protect are duly paid as and when due. We have recorded zero default in payment of coupons,” the trustee team said.
According to the team, the DLM Trust Company was able to generate more third-party transactions thereby creating more assets for the company.
“We have ensured and maintained a zero regulatory and statutory infraction record. Compliance is a major issue with DLM,” it said, adding that it provides extraordinary customer service to its clients by providing them with a quarterly Investors Report detailing the performance and progression of the transaction.
The COVID-19 pandemic which eroded the working capital of most mid-corporate firms that provide services within the value chain of multinationals and Nigerian corporates led to a spike in the demand for corporate borrowing. Citihomes, a subsidiary of DLM Capital said it was swift to respond to the lending opportunity with its bespoke financing products and disbursed up to N6billion in loans in 2021.
“With nearly every sector experiencing commercial disruption due to COVID-19 pandemic, overall funding needs skyrocketed. Citihomes created innovative lending products targeted at mid-corporate entities that cut across sectors such as Agriculture, Energy, Renewable energy, real estate, Logistics and transportation, Automobiles as well as financial services providers, in the consumer lending space. Citihomes was able to support a minimum of 24 businesses during the period under review,” the finance subsidiary of DLM said.
According to the arm of the business, it expects economic activities to increase significantly in the coming year, which undoubtedly will lead to more funding requirements by businesses.
“Accordingly, Citihomes is well-positioned to provide credit support through its innovative products to meet the funding needs of the mid-corporates that meet our risk acceptance criteria.
Links Microfinance Bank
On April 6 2021, DLM Capital announced its acquisition of Links Microfinance Bank to expand into Nigeria’s million-dollar fintech sector.
According to DLM, the investment turned out to be a huge success. The development investment bank said it created a strong digital bank (Sofri) as a result of the acquisition, which it plans to present soon.
“The Nigerian banking population will marry the Sofri digital bank. The young-at-heart, in particular,” the team at the Links Microfinance Bank said.
Acknowledging that default rate is unavoidable in today’s financing environment, the microfinance subsidiary of DLM said it has, however, created a proactive credit framework that combines artificial intelligence and business intelligence models to help its business identify credit risks and mitigate them.
On the number of consumers the subsidiary plans to reach with its credit product, the microfinance arm of DLM Capital said “our strategy is to drive optimal lending business across Africa as a whole, which we will accomplish through our diverse credit products and the use of technology.”
According to the subsidiary, its digital banking platform serves as a one-stop-shop for all financial needs. “It is designed to provide our consumers with simple banking services. It simply means ‘easy, peaceful, tranquil, comfortable, stress-free,’ as does the brand name Sofri Sofri.”
Explaining the product offerings of Sofri, the subsidiary states that “loans can be obtained fast, and bill payments can be performed with a minimal fee or for free. Also, a Sofri card for easy payments across the web, POS etc.”