The official rolling out of a trust fund by the National Association of Microfinance Banks (NAMB) Lagos chapter and the BGL known as the NAMBLAG/BGL Trust Fund is expected to bring to an end the long financial starvation of the people at the grassroots as there will not only be enough funds for on lending to them.

Apart from having enough funds, they will also access the credit at a single digit interest rate. Presently, most microfinance banks are charging six percent interest rate per month on a reducing balance. This, however, has been attributed to high cost of sourcing fund by operators.

More so, as the Federal Government is trying to diversify the economy with much focus on agriculture, the local farmers can now have access to funds to boost their agricultural business. This will in turn lead to employment creation because as businesses expand, more human capital will be required.

Taking a bull by the horn after waiting endlessly for the one percent of the annual budget of the local and State governments, support from the Federal government and the Central Bank of Nigeria (CBN)’s microfinance development fund, the Association last week officially rolled out a NAMBLA/BGL trust fund targeted at alleviating poverty in the country.

The NAMBLAG/BGL trust fund is a private fund set up to provide liquidity to microfinance banks at a single digit for onward lending to the active poor in Nigeria.

The parties to the fund include, BGL group, CDL Asset management limited, GTB trustees, credit registry, board of advisors, Emmanule Ijewere, Adebayo Adewusi, Valentine Whensu, Uhy Maaji, world view chambers, credit consultants, Nsikak Ekure, payment and settlement banks – skye bank plc, Fidelity bank, executive committee to the fund – Capstone, VCL, Infinity, Echo, Karies, Owotutu, Unicredit Microfinance banks.

The NAMBLAG/BGL trust fund will provide shirt term, medium and long term funds to microfinance banks at a single rate.

It was packed with the active support of international donors, agencies, Non Governmental Agencies (NGOs), and corporate bodies that are willing to support poverty alleviation, empowerment of the active poor and provide banking services to the underbanked.

“It is the first private fund initiative in Africa. It is going to be a landmark success. We want to set the pace that other countries can emulate,” said Olufemi Babajide, chairman of the Association.

He explained that there are 12 parties with track record involved in the fund that will ensure that it is well managed.

“The implication is that the rate at which we give to our members will be low. We want to do something reasonable and affordable to our customers,” he said.

Babajide advised every member of the association to contribute a minimum of N500, 000 to the fund before they can access it.

Speaking earlier on mismanagement of funds by operators, in an interview with BusinessDay, he said, “Those that can do that are gone. With our internal regulation, with the way we are meeting, as an association that will not happen. A lot of things happened in the past because there was no strong association. But we all know that we have burnt our fingers, we have made mistakes, let us get this fund and let us use this judiciously.”

SOURCE: Business Day Online