By Isaiah Benjamin, Leadership Managing Director of the Nigeria Deposit Insurance Corporation (NDIC), Alhaji Umar Ibrahim, has disclosed that the corporation paid N3.303 billion out of the N5.241 billion insured deposits of 35 DMBs that were liquidated between 1994 and 2005. He said the corporation also paid N6.151 billion out of N11.576 liquidation... 

By Isaiah Benjamin, Leadership

Managing Director of the Nigeria Deposit Insurance Corporation (NDIC), Alhaji Umar Ibrahim, has disclosed that the corporation paid N3.303 billion out of the N5.241 billion insured deposits of 35 DMBs that were liquidated between 1994 and 2005.

He said the corporation also paid N6.151 billion out of N11.576 liquidation dividends that were declared to depositors of the 35DMBs, and paid N2.26billion to depositors of 103 closed microfinance banks (MFBs) as at 31st March, 2012.

He reiterated that since August 2011, the continuation of the payment to the depositors was transferred to eight banks across the country,which include First Bank Plc, Access Bank Plc, Unity Bank Plc, Mainstreet Bank Limited, Union Bank Plc, Wema Bank Plc, UBA Plc and Zenith International Bank Plc.

He, however, disclosed that Savannah Bank and Societe Generale Bank were not liquidated and that customers should hold them responsible for their deposits. The NDIC director, Internal Audit, Alhaji Ibrahim Tafida, who represented the MD, said that contrary to insinuations, the two banks were not under liquidation as the NDIC takes care of only customers of banks that were liquidated.

“The Central Bank of Nigeria (CBN) withdrew the license of Savanah Bank in 2002 and the management went to court where they got back their licence.

So as far as the NDIC is concerned, the bank is still in existence. The management of the bank should be held responsible for the depositors’ money until such a time their license is withdrawn and they are put under liquidation.

“Right now they are not under liquidation and the NDIC has not taken over the bank. It is the same thing with the Societe Generale Bank which the NDIC attempted to close but the shareholders went to court and the court gave them the right to continue to manage their bank and bring it back to life.

“We liquidated 35 banks before 2005, but as at today there are 45 banks under liquidation and we have set aside funds to pay all their insured depositors.

From GhanaWeb Microfinance and Small Loans Centre (MASLOC) on Thursday signed an agreement to outsource its loans recovery activity to UT Collections Limited (UTCL), a subsidiary of UT Holdings to enable the Centre retrieve its “delinquent loans.” Currently, the Centre’s total amount of loans in debt stands at GH¢49.5 million. Speaking at... 

From GhanaWeb

Microfinance and Small Loans Centre (MASLOC) on Thursday signed an agreement to outsource its loans recovery activity to UT Collections Limited (UTCL), a subsidiary of UT Holdings to enable the Centre retrieve its “delinquent loans.”

Currently, the Centre’s total amount of loans in debt stands at GH¢49.5 million.

Speaking at the signing ceremony in Accra, Ms Bertha Ansah-Djan, Chief Executive Officer of MASLOC, said UTCL is expected to retrieve GH¢10.45 million in the first phase of the loan recovery exercise and any new debt within the one-year agreement.

She said management had realized that the Centre needs greater impetus to upscale the loan recovery effort but conceded that MASLOC’s staffing and logistical resources were too over-stretched to achieve the needed results.

Ms Ansah-Djan said “we are outsourcing this activity in order that we would not be distracted from our current programmed activities as we seek to better manage our stretched resources even more efficiently.”

She described the credit history in the country, particularly for public supported funding schemes as not impressive enough adding, there was the need to seek collaboration of a private sector institution with an impressive track record in loan recovery to handle it.

Ms Ansah-Djan observed that more than GH¢300 million was needed to finance loan applications and the Centre’s obligation both for new and existing loans.

She said the Centre had made a shift in its portfolio management policy adding that, “Credit administration is a two-way affair with credit officers being in charge with both disbursement and recovery in their individual portfolio management. As a result, recovery rates have been far more impressive than before.”

Col (Rtd) Kaku Korsah, Board Chairman of MASLOC, said the Centre could not be sustainable in supporting the productive poor in society if it was beleaguered with huge debts.

Highlighting some bad debts that had hit the Centre, he said GH¢3 million was in arrears in the Ashanti Region whiles Greater Accra Region was GH¢1 million indebted to the Centre.

He expressed confidence in the ability of UTCL to assist in recovering the loan so that the Centre could continue to disburse loans to small-scale enterprises.

Major (Rtd) Stephen Antwi-Boateng, Managing Director of UTCL, said the company would be effective yet humane in their strategy to recover the loans.

MASLOC was established to provide, manage, regulate and approve funds for microfinance and small-scale credit schemes and programmes.

The Centre targets mainly the productive poor and vulnerable in the society including women, physically challenged and the youth, who are engaged in micro and small scale businesses to provide quick and easily accessible micro-credit facilities to reduce poverty and create employment and wealth.

MASLOC provides micro-credit or group loans, small loans, wholesale lending to microfinance institutions, Ministries, Departments, Agencies and rural banks for on-lending to the productive poor.

Economic activities funded by the Centre include food crops, agro-processing, poultry, micro-enterprise, vocations, handicrafts, fish farming and agricultural machinery.

By Saijil Singh, MoneyWeb Unsecured micro-lending is growing, despite high risk. South Africa has witnessed extraordinary growth in unsecured micro-lending over the last few years. Is this due to South African banks taking uncalculated risks in favour of higher premiums, or merely due to a correction of previous discrepancies in the South African... 

By Saijil Singh, MoneyWeb

Unsecured micro-lending is growing, despite high risk.

South Africa has witnessed extraordinary growth in unsecured micro-lending over the last few years. Is this due to South African banks taking uncalculated risks in favour of higher premiums, or merely due to a correction of previous discrepancies in the South African credit industry?

If this situation is not monitored closely, South African banks could be heading down a slippery slope.

Micro-loans are easily accessible to the greater public. Demand is such that banks can charge as much 32% interest, while the product still remains attractive.

Traditionally, South African banks did not offer unsecured credit to local lower income earners. These individuals were forced to use other less regulated alternatives, such as loan sharks, to cater to their credit needs.

Prior to the passing of the National Credit Act, banks were content with pursuing larger premiums from large secured loans such as property bonds. This later proved to be not as profitable as anticipated due to overstated property prices and difficulties in collecting debt from customers that defaulted.

The National Credit Act set new rules that made these large secured loans even less profitable. The Act also changed the rules for micro-lending, limiting the amount that could be charged for interest and administration. This eliminated traditional unregulated credit providers and left a gap in the market, making it feasible for banks to enter the micro-lending sector.

In South Africa’s current low interest rate environment and its minimal volatility, it is difficult for banks to make large margins on their traditional lending products. The banks all offer the same services and the only differentiation is price.

To make matters more difficult, the requirements stipulated under Basel III have also driven up the cost of lending, especially longer-term home loans, making them less profitable for banks. As a result, banks are being forced to seek revenues elsewhere to keep profits up and shareholders happy. Hence the large marketing to, and high growth in, micro-lending.

Coface South Africa believes the current growth rate is not sustainable. The risk in the micro-loans business is high, even though the lending base is vastly diversified due to the large number of individuals making up the base.

If the economy were to suddenly go into a downward spiral or interest rates were to rise, micro-lending banks would probably suffer great losses due to a major domino-effect default.

A substantial portion of the growth in the micro-lending can be explained by previous inconsistencies in the regulated credit industry. However the situation needs to be monitored closely to ensure that banks are following the correct procedures, those defined by Basel II, and are not recklessly lending funds simply to keep profits up.

*Saijil Singh is the lead analyst at Coface South Africa

By Akinola Ajibade, The Nation The Nigerian Deposit Insurance Corporation (NDIC) is to charge to court erring debtors of 103 microfinance banks in liquidation. The development follows the refusal of the debtors to pay up – in line with the corporation’s loans recovery and assets valuation programme. Confirming the development, the Director... 

By Akinola Ajibade, The Nation

The Nigerian Deposit Insurance Corporation (NDIC) is to charge to court erring debtors of 103 microfinance banks in liquidation.

The development follows the refusal of the debtors to pay up – in line with the corporation’s loans recovery and assets valuation programme.

Confirming the development, the Director of Research, NDIC, Mr Ade Afolabi, told The Nation that the court option was arrived at to recover all the debts owed the banks and further put them back on track.

He said the corporation has resolved to collect the debts owed microfinance banks, among other insured deposit-taking institutions.

“As regards the punishment for defaulters, we will charge them to court in order to recover the debts they are owing the liquidated microfinance banks,” he said.

Afolabi said NDIC’s primary concern is to protect depositors, contribute to the stability of the financial system through effective supervision of insured institutions, ensuring that prompt payment of guaranteed sums to the depositors, and making orderly resolution of failed institutions.

He said the financial undertaker has appointed debt collection agents and had discussions with the Assets Management Corporation of Nigeria (AMCON) for the disposal of secured debts of the closed banks.

According to him, the debt recovery agents include lawyers and accountants, among other professionals working with the NDIC.This, he said, are the only people designated to recover debts on behalf of the agency.

On deadline for debtors, Afolabi said none has been fixed for the recovery of all the debts owed the microfinance banks sub-sector.

“We are making the date for the payments of debts open because we want to enable debtors pay whatever they are owing the banks. Though the capacity to pay the debts lies with the debtors of the banks, the need to pay the debts is important. What we are saying is that the debts must be paid back in the interests of the banks”, he said.

In a related development, NDIC has assigned 21 recovery agents for 68 closed MfBs in Lagos. This will be followed by Rivers and Ogun states with three and two agents each for six and four closed microfinance banks respectively.

Oyo State got one recovery agent for four closed MfBs, while Edo State and the Federal Capital Territory (FCT) have one recovery agent for three closed microfinance banks each. The rest are Delta and Enugu states with one recovery agent for two closed MfBs each while Osun State has one recovery Agent for one closed MfB.

The corporation realised N102.6 million from the sale of physical assets, loan recovery and advances owed the banks. Out of the amount, N86.49 million was realised from the sales of chattels while N16.11 million was recovered from debts owed the banks.

From The Luxembourg Bankers’ Association LuxFLAG is pleased to announce that two new Microfinance Investment Vehicles have been granted the LuxFLAG Microfinance Label. These are the Access Africa Fund LLC – the first US domiciled MIV to receive the LuxFLAG Microfinance Label and Fonds Européen de Financement Solidaire (FEFISOL), S.A.... 

From The Luxembourg Bankers’ Association

LuxFLAG is pleased to announce that two new Microfinance Investment Vehicles have been granted the LuxFLAG Microfinance Label. These are the Access Africa Fund LLC – the first US domiciled MIV to receive the LuxFLAG Microfinance Label and Fonds Européen de Financement Solidaire (FEFISOL), S.A. SICAV-SIF.

“LuxFLAG is honoured to welcome Access Africa Fund LLC as a first non-Luxembourg domiciled MIV that receives the LuxFLAG Microfinance Label”, said Daniel Dax, General Manager of LuxFLAG.

Access Africa Fund, a Delaware company, was formed by CARE USA. It is managed by MicroVest Capital Management and invests in microfinance projects in sub-Saharan Africa.

FEFISOL, a Luxembourg company, is managed by Solidarité Internationale pour le Développement et l’Investissement (SIDI), a French NGO. FEFISOL focuses on providing local currency funding to microfinance organisations in rural areas mainly in Sub-Saharan Africa.

The LuxFLAG Microfinance Label assists capital raising by Microfinance Funds by reassuring investors that the Microfinance Investment Vehicles really invests the majority of its assets in the microfinance sector in a responsible manner.

24 MIVs have been granted the LuxFLAG Microfinance Label as of April 2012, representing approximately USD 3.48 billion in Assets Under Management.

MIVs labelled as of April 2012:

Note: The LuxFLAG Microfinance Label is valid for a period of one year and is subject to renewal on expiry.

Details of the twenty four labelled MIVs are available on LuxFLAG’s website: www.luxflag.org. The website also contains details of the LuxFLAG Microfinance Label Eligibility Criteria and an Application form that can be downloaded by entities wishing to apply for the LuxFLAG Microfinance Label.

For further details contact:

Daniel Dax or Sachin Vankalas
daniel.dax@luxflag.org / Sachin.vankalas@luxflag.org
Tel: +352 22 30 26 – 1

From Business Day Online In its bid to continue building wealth for its members, the Nigerian National Petroleum Corporation (NNPC) Staff Co-operative Multipur­pose Society Limited, Lagos has disclosed that it has set plans in motion to get a li­cense which would enable it set up a microfinance bank, which members and non members can benefit... 

From Business Day Online

In its bid to continue building wealth for its members, the Nigerian National Petroleum Corporation (NNPC) Staff Co-operative Multipur­pose Society Limited, Lagos has disclosed that it has set plans in motion to get a li­cense which would enable it set up a microfinance bank, which members and non members can benefit from.

Speaking at the compa­ny’s AGM (Annual General Meeting),Opeyemi Adeleke, revealed that the co-operative is doing this on the heels of the successes and achieve­ments it has made internally, as concerns management of funds, which has to a large extent made life better for its members.

With this in mind, the NNPC co-operative has de­cided to take it a notch further by rendering services that would help change lives for good in the form of a microfi­nance bank, where Nigerians would also benefit from.

Adeleke further said, the co-operative has budgeted N11.029 billion for its 2012 financial activities against N5.403 billion in 2011.

This, according to the president Ojeyemi Adeleke would boost the cooperative chances of bigger returns this year.

According to Adeleke, the activities of the co-operative would be driven by expected N4.2 billion remittances from the NNPC’s subsidiaries, N3 billion loans from banks and N1.5 billion deposits for hous­ing while income from inter-city buses is expected to rise to N300 million and sale of Abuja house at N100 million.

“We would explore agri­culture, among others, to gen­erate revenue and to ensure members retire with peace of mind, and enjoy comfortable life while still in service and after retirement.”

Adeleke further noted, “Looking at 2011, there is no doubt that 2012 will be a bet­ter year. However, among the concerns that may frustrate that aspiration is the irregular remittances of our monthly deductions.

“The major sources of anticipated improvements in our outlook are timely remit­tance from all subsidiaries, online real time business transactions, improvements in overall corporate gover­nance, as well as better busi­ness policy effectiveness,” he said.

He added that despite the impact of the global econom­ic crisis, which brought about a huge decline of global eco­nomic activity, huge liquidity squeeze, restiveness in the oil and gas industry, the society was able to overcome the challenges due to the fact that it was built on a strong and enduring foundation, sound corporate governance, integ­rity and intellectual capacity.

“It is noteworthy that our society was able to navigate the challenging year by con­verting the various challenges to opportunities.”

From Sunday Nation Agricultural financier Orion has announced plans to increase the loan fund for its re-launched Kilimo Faida microfinance programme to Sh80 million. The move is aimed at expanding the reach of the unique micro-finance solution to more farmers. “We are seeking an initial Sh20 million of funding guarantees to expand this programme.... 

From Business Day Online A consulting firm, KUDITECH Investment Limited, is seeking partnership with the Kano State Government to establish micro-finance banks in each of the 44 local government areas of the state. Prof. Pedro Alimi, the Chairman of the company disclosed this on Thursday in Kano when he paid a courtesy call on Alhaji Abdullahi Mahmoud,... 

By Hope Moses-Ashike, Business Day Online Apart from empowering the economically active people, jobs are expected to be created in a N40-million strategic partnership between Amuwo Odofin Local Government Area, the Lagos State Microfinance Institution (LASMI) and Cowries Micro Finance Bank. Gbolahan Adeyemi, chairman, Poverty Alleviation Unit,... 

By Hope Moses-Ashike, Business Day Online

Apart from empowering the economically active people, jobs are expected to be created in a N40-million strategic partnership between Amuwo Odofin Local Government Area, the Lagos State Microfinance Institution (LASMI) and Cowries Micro Finance Bank.

Gbolahan Adeyemi, chairman, Poverty Alleviation Unit, in the local government, who disclosed this at an interactive session on effective tips for small business growth, commended the local government for this initiative. Tagged ‘Effective Tips for Small Business Growth and the Relevance of Local Government Levies to Community Development,’ the interactive session was aimed at educating residents of the local government on how to establish and successfully grow a business, the impact of climate change and environmental maintenance, and the importance of levies to community development.

Adamu Fatima, special adviser to the local government chairman on market and revenue generation, said the event was also intended to provide critical information on how to sustain and grow personal businesses as well as generate the necessary resources for funding government projects to bring about meaningful and sustainable development to the community.

In his opening speech at the event, Ayodele Adewale, the local government chairman, reiterated that the essence of the interactive forum, among others, was to establish mutual benefits, satisfy the interest of members of the public, in terms of economic empowerment through personal business growth, and pursuing the goal of good governance through a sustained drive towards the general good for the maximum number of the people.

Adewale disclosed that small-scale businesses form 75 percent of the industrial make-up and strength of both the emerging and established economies like Dubai, India, Malaysia, China, Singapore, Japan and other Asian Tigers. “We have been working assiduously to pursue people-driven programmes and projects in other to create sustainable society – from primary healthcare delivery service to primary education, infrastructures, agricultural development, rural urbanisation, youth and sports,” the chairman stated.

He listed some of the local government’s developmental stride in the first quarter of the year as road rehabilitation, which had been pursued conscientiously, rehabilitation of Aroso Market Road, free drugs and treatment for the vulnerable age group (0-16 & 60 years above), youths empowered through sports and other skill acquisition programmes, disclosing that the administration, in partnership with Camp David, had voted N4 million for the development of sports in 2012, to be drawn quarterly.

Adewale, however, appealed to all to complement the effort of the government through paying of levies, explaining that all their achievements so far couldn’t have been realised if the issues of local government levies were not taken seriously.

Olufemi Ogunbode, leadership training specialist from the Entrepreneurship Development Centre (EDC), emphasised the relevance of local government levies to community development, stressing that that taxes, levies and rates collected by the local government were used to provide infrastructure, utilities and other benefits critical to creati ing wealth and maintaining the environment to ensure business development and growth.

By Donwald Pressly, Business Report A new umbrella microfinance agency, which will fall under the Industrial Development Corporation (IDC), will use the new Postbank facilities at post offices around the country to fast-track loans to small businesses. Announcing the establishment of the SA Finance Enterprise Agency (Safea) in Parliament yesterday,...