By Hope Moses-Ashik, Business Day Online As a follow up to the certification programme for microfinance banks, the Central Bank of Nigeria (CBN) in collaboration with the Nigeria Deposit Insurance Corporation (NDIC) and Financial Institutions Training Centre (FITC)will be organising a one-week mandatory training programme for Directors of all Microfinance... 

By Hope Moses-Ashik, Business Day Online

As a follow up to the certification programme for microfinance banks, the Central Bank of Nigeria (CBN) in collaboration with the Nigeria Deposit Insurance Corporation (NDIC) and Financial Institutions Training Centre (FITC)will be organising a one-week mandatory training programme for Directors of all Microfinance Banks (MFBs) in six locations in June, 2012.

The programme is aimed at exposing these directors to microfinance fundamentals and in the process, equipping them with essential skills needed to operate their institutions efficiently, such that these institutions will be well positioned to effectively discharge their developmental role in the national economy, going forward. Key topics to be covered during the training programme include;introduction to microfinance, managing microfinance banks, financial statement analysis and planning, risk management, corporate governance, and regulatory issues and management of microfinance banks.

To ensure national coverage and facilitate participation of all microfinance banks across the country, the training programme will be held at six centres over a three week run. The centres are Port Harcourt and Enugu from June 4th to 8th, 2012; Ibadan and Abuja from June 18th to 22nd, 2012 and the two centres in Lagos from June 25th to 29th, 2012. Additional details on this programme are on the FITC website, http://www.fitc-ng.com.

In order to ensure affordability by all microfinance banks, the course fee has been significantly subsidised by the CBN and NDIC. In furtherance of this, each microfinance bank is expected to nominate two of its directors to attend the training programme.

It is expected that at the end of this mandatory training programme, the microfinance banks that participate in the programme, will be in the right position to support the Federal Government’s aspiration to transform the national economy, as experienced in the emerging markets and the developed economies by delivering on their respective institution’s mandates.

From Business Day Online The Central Bank of Nigeria (CBN) says it has developed an exposure draft on Financial Inclusion Strategy to improve the percentage of Nigerians key into the cash-lite policy. The bank disclosed this in a statement issued by the Development Finance Department and posted on its website on Wednesday. It said that the development... 

By Olamilekan Andu, The Nation The National Anti-Corruption Volunteer Corps (NAVC), an arm of the Independent Corrupt Practices and Other Related Offences Commission (ICPC), has recovered N3 million bad loans from customers of Ijebu-Ife Microfinance Bank Nigeria Limited, Ijebu East Local Government Area of Ogun State. The money was recovered in the... 

From This Day Live The Central Bank of Nigeria (CBN) has said it had developed a strategy aimed at reducing the percentage of Nigerians excluded from financial services from 46.3 percent as at 2010, to 20 percent by 2020. As a result of this, the apex bank said it had developed an exposure draft on financial inclusion strategy for Nigeria. The draft,... 

From Leadership, Nigeria The National Association of Micro finance Banks (NAMB) said on Wednesday in Abuja that microfinance banks improved the country’s Gross Domestic Product (GDP) by 3 per cent in 2011. Alhaji Kabir Yar’adua, NAMB’s Executive Secretary, said this in an interview with the News Agency of Nigeria (NAN). Yar’adua... 

From Leadership, Nigeria

The National Association of Micro finance Banks (NAMB) said on Wednesday in Abuja that microfinance banks improved the country’s Gross Domestic Product (GDP) by 3 per cent in 2011.

Alhaji Kabir Yar’adua, NAMB’s Executive Secretary, said this in an interview with the News Agency of Nigeria (NAN).

Yar’adua said that the association was doing all it could to ensure that it stepped up the its GDP contribution to At least 20 per cent.

“The intention is for the contribution to be up 15 to 20 per cent. We have a long way but surely we are going there. All indicators are pointing to that direction and don’t forget recently the Central Bank sanitised the sub-sector.’’

Yar’adua said a number of factors were working against the realisation of the objectives of the micro finance banks and gave the assurance that the association would do all it could to address some of the challenges.

He said that the inability of people to differentiate between microfinance banks and microfinance institutions was affecting the operations of microfinance banks.

“There is a lot of mistrust from the public; public don’t trust microfinance banks because they don’t know the difference between microfinance institutions and microfinance banks.

“We have microfinance institutions that get registered at the Corporate Affairs Commission to operate as cooperative societies or microfinance institutions.’’

He said that the mistrust had impacted negatively on the members.

According to him, no company has the right to canvass for deposits from the public without first obtaining licence from the central bank.

He suggested that Federal Government should introduce a kind of intervention fund to the microfinance industry just like it has done in other areas of the economy.

According to Yar’adua, the association has been meeting with the Central Bank of Nigeria (CBN) to set up the Microfinance Banks Development Fund.

He said that the fund would empower the micro and small enterprises, being the engine of growth of any economy.

By Hope Moses-Ashike, Business Day Online For N8.33 million assets to be recovered to date from microfinance banks in liquidation, shows that the measures put in place for assets recovery by the Nigeria Deposit Insurance Corporation (NDIC) are effective. The NDIC recently appointed debt recovery agents (DRAs) for microfinance banks (MFBs) in liquidation... 

By Hope Moses-Ashike, Business Day Online

For N8.33 million assets to be recovered to date from microfinance banks in liquidation, shows that the measures put in place for assets recovery by the Nigeria Deposit Insurance Corporation (NDIC) are effective. The NDIC recently appointed debt recovery agents (DRAs) for microfinance banks (MFBs) in liquidation to fast track recovery of debts owed to the 103 closed MFBs’ customers nationwide.

In his acceptance speech at the occasion of the Business Hallmark people of the year award, Umar Ibrahim, managing director/CEO, NDIC, disclosed that the sum of N8.33 million had been recovered to date in respect of the closed MFBs.

According to him, one of the principal liquidation activities of the corporation is the realisation of assets of the closed banks. The cumulative recovery for the banks in liquidation since 1994 rose from about N21.756 billion to about N22.158 billion in 2011, representing an increase of about 2 percent.

Ibrahim noted that in August 2011, the corporation commenced payment of insured deposits to the depositors of Triumph and Fortune banks closed in 2006, thereby bringing relief to the depositors whose deposits were trapped due to protracted litigation.

Following the revocation of operating licences of the 103 MFBs by the Central Bank of Nigeria (CBN), in September 2010, the corporation had, as of August 2011, directly paid an aggregate sum of N2.024 billion to about 70,424 depositors, which represented about 41 percent of the total insured amount of about N4.94 billion.

He said the rest of the depositors continue through branches of appointed agent banks close to the location of their closed MFBs.

The corporation continued with the payment of insured sums as well as liquidation dividends to uninsured depositors of the banks closed before 2006 and those closed in 2006.

At the end of November 2011, the cumulative insured deposits as well as the liquidation dividends paid in respect of 35 banks that were closed before 2006 were N3.304 and N6.162, respectively. Similarly, cumulative insured deposits and the liquidation dividends paid in respect of 13 banks closed in 2006 were N4.294 billion and N66.757 billion, respectively. However, in furtherance of its efforts in ensuring protection for all consumers of the financial system, the corporation is in the vanguard of advocating for an integrated deposit insurance system in the country.

Under the system, protection would not only be for small depositors of banks, but also extended to small investors in the capital market as well as small conventional insurance policy holders. When put in place, it would facilitate orderly development and growth of the entire financial system.

Furthermore, in order to support the new licencing regime and as part of its preparations to extend Deposit Insurance System (DIS) to non-interest banks, the corporation has developed a framework that would enable it extend DIS to non-interest bearing financial institutions that would be licensed in due course by the CBN.

The development aims at creating a level playing field for all operators in the banking system as well as facilitating financial inclusion in Nigeria.

By George Ngigi, Business Daily Africa Microfinance institutions (MFIs) are set to begin submitting names of loan defaulters to credit reference bureaus next month, further locking out bad borrowers from the accessing debt. The micro-financiers will only share the data among themselves in the early stages of the initiative, while waiting for the... 

By George Ngigi, Business Daily Africa

Microfinance institutions (MFIs) are set to begin submitting names of loan defaulters to credit reference bureaus next month, further locking out bad borrowers from the accessing debt.

The micro-financiers will only share the data among themselves in the early stages of the initiative, while waiting for the law to be reviewed to allow them to open up their data to other credit providers.

“We are working with a June target for our members and September for the industry as a whole,” said the CEO of the Association of Microfinance Institutions (AMFI), Benjamin Nkungi.

MFIs have been seeking to access information held by credit reference bureaus on serial loan defaulters on fears of giving credit to blacklisted borrowers, who turn to them after being locked out by banks.

Commercial banks have increased their usage credit bureaus to lock out defaulters, making MFIs vulnerable to such borrowers.

Mr Nkungi said that they will be relying on the fact that the Micro-finance Act of 2006 does not outlaw sharing credit information to blacklist defaulters.

He, however, acknowledged that the law is not clear on sharing of customers’ information, which is considered confidential.

“There will be need to change clauses on the loan application forms to get consent from borrowers and to offer financial education so that they can understand the benefit of this system,” said Mr Nkungi.

Credit information sharing is meant to reward good borrowers by giving them a bargaining tool for lower interest rates and lower collateral requirements.

Lack of robust information systems is also a challenge to micro-finance institutions, with the association stating that some of them use excel sheets to compile their data.

“For institutions that do not have resources to invest in IT infrastructure we are going to use cloud computing platform-where you pay for use. We are already discussing with a few providers,” said Mr Nkungi.

Consultants hired by the association also said the practice by microfinance institutions to push guarantors to settle loans in default exposed the system from failing to capture some serial defaulters.

Most of the institutions give loans to members of a group who co-guarantee each other. In case of defaults, other group members are expected to settle the loan balance.

The minister of finance last year proposed review of the Banking Act to allow information sharing between banks and deposit taking microfinance institutions.

There are six deposit taking micro-financiers in the country compared to 43 institutions that are members of AMFI.

By Hope Moses-Ashike, Business Day Online Loan defaulters in Micro Finance Banks (MFB) have continued to enjoy an unexpected reprieve as the Central Bank of Nigeria (CBN) is yet to establish a special court to try suspects, over one year after it pronounced it would do so. This has raised concern among operators of micro- finance banks, as the... 

By Hope Moses-Ashike, Business Day Online

Loan defaulters in Micro Finance Banks (MFB) have continued to enjoy an unexpected reprieve as the Central Bank of Nigeria (CBN) is yet to establish a special court to try suspects, over one year after it pronounced it would do so.

This has raised concern among operators of micro- finance banks, as the delay is negatively affecting their activities.” Some loans that would have been recovered if the special court had been established are already going bad. Operators are desperately looking forward to instituting such special court because it will send a signal to loan defaulters to pay.

Olufemi Babajide, chairman, National Association of Microfinance Bank (NAMB) Lagos State chapter, said the

Sub-sector needed the special court as quickly as possible.

According to him, the delay in setting up the special court is drying liquidity in the industry.

He explained that there are cases of borrowers not wanting to pay, even when they have the ability to pay.

They have been taken to court, and the court keeps adjourning the cases. “So we need a special court that can treat cases of microfinance banks within 30 days. If there is a special court, they will pay up,” he said.

Loan repayment has been a major problem in microfinance banking in the country and across the globe. !ere is no doubt that some microfinance banks have closed shop because they were not able to recover the loans given to their customers.

In Lagos State alone, over N10 billion is being owed by these micro depositors who borrowed money from their

various institutions. Babajide had expressed displeasure over the attitude of these beneficiaries, saying it would prevent other poor but economically active people from benefiting from the micro credit scheme.

To Ade Adesina, general manager operations NPF Micro finance Bank Plc, Lagos, banks’ attitude in the area of non-payment of money can kill any financial institution.

“This attitude cannot make business to thrive. It can kill any financial organization no matter how big or financially buoyant any organization might be.

The CBN February last year said it had sent a bill to National Assembly in respect of that. The special court unlike the conventional one would ensure quick resolutions of cases on loan defaults and encourage banks to give more loans.”

The conventional courts and other established organs do not possess absolute rights to deal with cases of loan defaults. Besides, the conventional courts are over congested and by the time judgments are passed, the loans would have gone bad.

According to the regulatory guideline for microfinance banks by the CBN, a microfinance loan is a facility granted to an individual or a group of borrowers whose principal source of income is derived from business activities involving the production or sale of goods and services. !e maximum principal amount shall not exceed N500, 000 or/and as may be reviewed from time to time by the CBN. Generally, a microfinance loan is granted to the operators of micro-enterprises, such as peasant farmers, artisans, fishermen, women, senior citizens and non-salaried workers in the formal and informal sectors. The said loans are usually unsecured, but typically granted on the basis of the applicant’s character and the combined cash flow of the business and household.

Ordinarily, the tenure of microfinance loans is 180 days (6 months). However, in the case of crops with longer gestation period, a maximum tenure of twelve (12) months shall be permitted. Microfinance loans may require joint and several guarantees of one or more persons.

From: Emmanuel Agyei – Joy Online The Bank of Ghana is warning the public against dealing with 4 Microfinance Companies.The Companies are MEDLORM Microfinance Limited, African Guarantee Trust, Abbey Cash Microfinance Limited and Swift Financial Services. The Central Bank says it has neither licensed any of these nor had any of them apply for... 

From Vanguard IFC, a member of the World Bank Group, and The MasterCard Foundation today launched a partnership to increase access to financial services for an estimated 5.3 million people in Sub-Saharan Africa. Building on recent economic momentum and stability in many African economies, the project will create new opportunities for economically... 

From Vanguard

IFC, a member of the World Bank Group, and The MasterCard Foundation today launched a partnership to increase access to financial services for an estimated 5.3 million people in Sub-Saharan Africa.

Building on recent economic momentum and stability in many African economies, the project will create new opportunities for economically disadvantaged people to expand businesses, gain access to cost-effective financial services, and manage risk.

Through this new $37.4 million partnership, IFC and The MasterCard Foundation will help microfinance banks expand more rapidly and develop new products and cost-effective delivery channels, while expanding coverage in new, often hard-to-reach locations. The project will also help providers to deliver low-cost mobile financial services to low-income customers.

“Disadvantaged people derive real benefits from having more control over their finances, and our partnership with IFC will help bring responsible financial services to a significant number of people in Sub-Saharan Africa,” said Reeta Roy, President and CEO of The MasterCard Foundation. “As we scale institutions and support new mobile financial service opportunities, this partnership will also create knowledge that will be invaluable in promoting greater financial inclusion.”

The MasterCard Foundation has become a major player in the field of microfinance, particularly in Sub-Saharan Africa, having forged partnerships worth more than $230 million since its inception in 2006. To date, these partnerships have helped provide financial services to over a million people, and provided another two million with access to financial education.

The MasterCard Foundation partnership is IFC’s largest with a private foundation. “This partnership leverages IFC’s global expertise, local knowledge, and client networks to promote greater financial inclusion,” said Nena Stoiljkovic, IFC Vice President for Business Advisory Services. “It will help IFC clients do more for low-income customers in Africa.”

Since its first microfinance investment in 1997, IFC’s involvement in microfinance has steadily increased, and IFC is now one of the top three global investors in microfinance.

As of June 2011, IFC had directly committed over $1.2 billion in investments to microfinance projects globally, with more than 150 financial institutions in over 60 countries.

IFC invested early in mobile financial services, supporting pioneers such as WIZZIT in South Africa, and providing advisory support to MTN in Nigeria and Airtel in Madagascar. IFC’s portfolio includes six investments with dedicated e-payment service providers, and investments with financial intermediaries and mobile network operators offering mobile wallets.

IFC’s microfinance and mobile financial services programs in Sub-Saharan Africa have received support from the African Development Bank, Austrian Development Bank, the Swiss State Secretariat for Economic Affairs (SECO), and the governments of Austria, Denmark, Japan, Luxembourg, and the Netherlands.