By Hope Moses-Ashike, Business Day

It is expected that activities in microfinance banks (MFBs) will resume soon and in earnest and operators would know their fate after election of the National Association of Microfinance Banks (NAMBs) and its proposed national annual general meeting in April.

It has been tough though with the MFBs in the country since 2009, when the sub-sector was bedeviled with liquidity crisis, leading to majority of them closing shop. However, the very few healthy ones are still going on with their businesses, inspite of the liquidity issue.

It is expected that the would-be national executive council (NEC) of the Association will address major issues affecting the sub-sector.

According to Section 12.2, sub-section (a) of the constitution of the Association which was distributed to members after the harmonisation exercise last year, the executive council shall ensure that members adhere to the rules, regulations, policies and procedures approved by the Central Bank of Nigeria (CBN) for the microfinance sector. Sub-section (b) states that the NEC shall oversee and execute the overall policies of the Association, and shall under sub-section (c) oversee and provide strategic direction for reporting standards and distribution of information among members.

More so, sub-section (d0 states that the NEC shall liaise with the CBN, other regulatory bodies, government, its agencies and other organisation on all issues relating to MFBs in Nigeria. Among others, it shall organise capacity building and exchange programmes for members as well as formulate its own standard code of conduct for member in line with the code of corporate governance for financial institutions, formulate disciplinary policies and enforce compliance on defaulting members, according to sub-section e, f and g of the constitution.

Already, operators have seen the emergence of one national association of MFBs as welcome development, as it will give a unified voice to the industry.

For instance, Uche Ubani, managing director, Peniel Microfinance Bank Limited, affirmed that the essence of having one umbrella association was to give a voice to the industry, adding that it would serve as a representation of the sub-sector to the regulatory authorities.

Also, Godwin Ehigiamusoe, executive director, Lift Above Poverty Organisation (LAPO), saw the harmonisation as a welcome development, but did not expect a remarkable impact on the poor in terms of access to credit. To Olatunde Olowu, former president, National Association of Microfinance Banks in Nigeria (NAMFBIN), the whole essence of having one umbrella association is to make the supervisory role of the regulatory authorities easy. “The regulatory authority will always try to work in consultation with the association, and then we will now disseminate all such information from the regulatory body to our members. That is why the association is very important. It is very important because the moment you can educate the members, then the problem of CBN is half solved,” he stated. Olowu, however, admitted that the harmonisation of the two associations had removed the misconception existing between them.

It could be recalled that the CBN last year harmonised the existing associations of MFBs, saying that the harmonisation was crucial to the success of the operation of the sub-sector. Prior to the harmonisation, the sub-sector was operating under two associations, which include National Association of Microfinance Banks in Nigeria (NAMFBIN) and the Association of Microfinance Banks in Nigeria (AMBIN). The two associations were dissolved at a meeting held recently in Lagos, and thereafter, a memorandum of understanding was signed.

Consequently, the regulatory authority set up a five-man committee to run the affairs of the association till January 29, 2010, when elections will be held to the various positions.

But the date was rescheduled to March 25 this year, and later changed to hold along with its national annual general meeting on April 8, 2010.