Nigeria: Nigeria not ripe for microfinance banking
By Providence Obuh, Vanguard Nigeria
The way microfinance banks (MFBs) operate in the country does not promotes banking culture, says Ausbeth Ajagu of Entrepreneurial Studies (AES) Excellence Club. “Until we go back to the drawing board to get the rules and principles right, we may not succeed”, he said.
In an exclusive interview with Vaguard, Ajagu, who is also the Chairman Corporate affairs and Strategic Planning, Manufacturers Association of Nigeria (MAN) said the problem of MFBs include lack of infrastructure, technologies to checkmate fraud, and also the mechanism to check staff, especially the performances of marketers in the industry.
He said “How would you expect a Chief Executive of MFB to be pursuing staff, checkmating them, doing everything to make sure they don’t become fraudulent, everyday they have to go to the market, because the true customers are the market women who do not go to the bank.
“The cost of running a micro finance bank is very high considering how much they collect from the market, sometimes N1,000, at other times N200 per day, how much does it cost to go to the market to collect such money?
“Microfinance banking, we are not ripe for it; every nation has its own peculiarity. It is just like the cashlite/cashless society, it will not work in Nigeria because we are not ripe for it. We have our predicaments, we have our peculiarity.
Technologically we are still backward and institutionally, we are backward, infrastructure unfortunate. “If you go to most POS terminals operated in the super markets, they don’t work any more so Nigeria is basically a cash society. Moreover, it is only in this country you don’t trust your banker because the pin number they give to you, they can go back to duplicate it and finish you.
“The awareness is not there, we are not where we are supposed to be, in terms of infrastructure and electricity wise, how many people have light, and you need light to operate your POS, there are so many handicaps.
“I have talked about education, I have talked about infrastructure, I have talked about technology, awareness, really, cashless is a good initiative, they operate every where in the world especially in developed countries, but we are not ripe in terms of infrastructure and technology to checkmate fraud in Nigeria.
For the Academy, he said, “We teach entrepreneurship, we prepare people to face challenges and we instill and inculcate good corporate governance best practices into our student such that they will have quest for growth.”