By Tina A. Hassan, Daily Trust -

What is the impact of small banking on small businesses?

Services that were difficult to access are now available to small businesses through the micro finance banks because the practice of micro financing is all about inclusive finance. The people at the bottom of the pyramid are able to access bank services that would otherwise be very difficult to get from the commercial banks that were not giving them facilities but are concerned with the big ticket transactions and the rich.

People are excited about micro finance banks unlike some lies being carried by some medium that micro banks are not reliable. An ordinary petty trader from Utako market can walk into a micro bank, see the manager and discuss on the kind of loan he needs, get it approved within hours or days and carries out his business.

Before the advent of small banks, nobody would listen to you and where they listened, they would tell you to go to different sets of managers or tell you to travel to Lagos – It was frustrating – but today micro finance banking has changed all these.

Are micro banks participating in disbursing the N200 billion agric loans floated by the federal government through CBN?

When the Central Bank of Nigeria (CBN) announced the Commercial Agriculture Credit Scheme, Microfinance Banks (MFBs) were not announced as participating banks; so, I think that is of no concern to us now. We are focused on supporting peasant farmers, small scale farmers and agriculturalists. There are several other agric packages that microfinance banks also give and the guidelines for commercial agric scheme does not accommodate small farmer.
If you look at the micro finance policy, it says that state and local governments should set aside one per cent of their budget to support microfinance banks but many of them are not doing that. so in my capacity as the Managing Director of Hasal microfinance bank, I do not have so much confidence in state governments for the success of micro financing. What I believe in is developing a partnership with state governments in the form a public private participation to develop the business of micro finance banking in the country.

I would like to see the private sector taking the lead in economic development while the government carries out its duty of providing the enabling environment for economic activities to thrive.

Another principle of micro finance banking is that government should not operate micro finance banking but they are to provide support to it. If anything is tied to government, it fails. Look at the National Agency for Poverty Eradication Program (NAPEP); this is a beautiful scheme like many others in the past that ought to have been successful but they are not. Now NAPEP has come to announce that it is changing its modus operandi for some of its village scheme, they now said they want it to be private sector led and this is the best.

Let us reduce governments’ participation in some of these activities. If we say that government should bring out money and put it where they can disburse it to micro finance banks, then the people would profit because we would be disbursing it based on qualifying criteria; but if it is to be handled by the government, then you would discover that other criteria and qualifications would come into play because the people would see it as part of the national cake and people would take these loans without repaying it back and that is the wrong way to administer micro finance.
How would you describe the practice of micro banking in the FCT?

So far we have done well. If you look at the FCT before micro banking started and the FCT after micro banking came into practice, you would notice that micro finance banks have created employment thereby reducing the number of the unemployed.

We have about fifty certified micro banks in the FCT alone and the average number of people a bank would employ is at least a hundred individuals.

We have empowered a lot of small businesses and they have grown. In our nineteen months of operation in Hasal, we have given micro-credit to almost 2, 000 people that previously had no access to small credit.

Because the practice of small banking is new to Nigeria; our research department is just being set up otherwise I would have given you accurate statistic of how much micro credit loans we have given as a group, I would tell you how many people have benefited, the sectoral allocation, how many are farmers and traders and the overall outlook of the impact of micro banks in the FCT.

I learnt you recently underwent a certification program with the CBN. What is it about?

When you apply for micro finance bank licence, one of the conditions for the issuance of the licence is that you write an undertaken to participate in a certification program for MFBs’ directors. The training requirement has always been there in the plan to allow micro finance banks, especially at the directors’ level to go through a certification program. What took place is a fulfilment of that initial plan that has been a part of the policy of the Central Bank of  Nigeria within the first three years of the operation or commencement of an operation program for the MFBs.

Every Managing Director of a micro finance bank was assigned to a training centre and is taught under one umbrella how to use the same syllable of the CBN in carrying out operations of MFBs with well accredited people who have gone through a train-the-trainer’s course. It is meant to bring everybody to the same platform because micro finance is new to the Nigerian economy.