Microfinance in Nigeria two years after CBN’s intervention

By Graham Orodje

Prior to CBN’s intervention, Microfinance in Nigeria was taking a swift decline into the abyss. The sector was riddled with fraud and mismanagement of funds. Some of the mismanagement may have been down to a lack of understanding of Microfinance by the senior managers in some of the Microfinance Banks. This assumption was corroborated by MFB’s renting lavish offices, providing their senior personnel with salaries and benefits similar to those offered by larger commercial banks. CBN’s intervention was late in coming, but was nonetheless welcomed.

CBN set about evaluating the entire sector and took action to address some of the issues that had plagued it. This included withdrawal of the licenses of some of the MFB it believed were not fit for purpose. CBN also disposed of the one size fits all license and created three licenses; Local, State and National. Each one required different starting capital and on-going minimum capital. Many MFBs recapitalised to meet the new requirement. CBN’s actions to sanitise the sector was complemented by NDIC’s (Nigerian Deposit Insurance Corporation), who commenced a repayment program for depositors of MFBs that had closed as a result of mismanagement or had their licenses withdrawn.

The actions have brought some stability to the sector, although there is still some way to go before the sector can start to fulfil its social remit of financial inclusion and poverty alleviation.

A few problems still continue to plague the sector. The key ones include rates of interest charged by MFBs, location of MFBs and financing.

There have been numerous articles suggesting the levels of interest rates charged by MFBs in Nigeria are too high. They range from 30% to over 60%. This level of interest will demotivate many but the desperate to seek loans from MFBs. The pressure of meeting the repayments with high interest rates can also be counterproductive. Any Microbusiness owners paying these levels of interest will not be able to grow their businesses and improve their lives. The damaging effect of high interest rates caused to Microfinance in India must be noted and not allowed to happen in Nigeria. The interest rates in India were much lower than the ones reportedly charged by MFBs in India, but were still too high and caused many to commit suicides. It is not advocated that interest rates should be regulated, but Microfinance Banks must be continually made aware of the need for responsible lending and the need to ensure interest rates are not excessive.  Any reported excessive interest rates must be investigated by CBN and punitive action must be taken against any MFBs found guilty of excessive profiteering.

Many MFBs are located in urban areas. There needs to be an increase in the number of MFBS located in rural areas. Whilst there is a need for some Microfinance Banks to be located in urban areas, the requirement for rural based Microfinance Banks is much more critical for wider financial inclusion because it is unlikely that larger commercial banks will have any presence in rural communities. Commercial banks should also be encouraged to open accounts for Micro businesses and those of low income.

The stability in the sector has encouraged international Microfinance Investors to provide finance to some MFBs. This is likely to continue as the sector continues to grow and eradicates past errors.

The stability in the sector has encouraged more international Microfinance Investors to provide finance to some MFBs. This is likely to continue as the sector continues to grow and eradicates past errors.

The introduction of a Microfinance Development Fund has been mooted. As yet this has not materialised. When the fund is finally introduced, most of it should be targeted at those MFBs that are either based in rural areas or have a good concentration of their business in rural areas.

Nigeria: More liberal loan terms coming for women

By Collins Nweze, The Nation

The Central Bank of Nigeria (CBN) is planning a microfinance development fund (MDF) to eliminate gender disparity by ensuring that women’s access to financial services increases by 15 per cent annually. The MDF would assist in addressing teething challenges of under-funding for microfinance institutions and improve financial inclusion.

CBN Governor Sanusi Lamido Sanusi disclosed this in a statement tagged: Increasing Women Access to Finance: Challenges and opportunities. He said policy, regulatory and supervisory roles of the apex bank in this directive will be firm and decisive, in view of the peculiar challenges faced by women in accessing financial services.

He said the banking watchdog has approved the establishment of Micro, Small and Medium Enterprises Development Fund (MSMEDF) of which 60 per cent of the fund would be committed to providing funding to women to address their peculiar financial exclusion challenges.

The MSMEDF was established to provide grants for capacity building of staff in microfinance institutions, on women based lending, promoting the development of regulatory provisions that are favourable to women lending, supporting initiatives that can improve financial literacy and entrepreneurship development for women clients. Other key objectives include supporting programmes that are geared towards the mobilisation of women, research and development, and promotion of women friendly financial innovations and products.

Sanusi said the experience of the Grameen Bank of Bangladesh where over 90 per cent of the rural women were financially empowered with near zero default rate provides evidence that women might be better fund managers. “Of loans made by the bank, over 98 per cent were recovered, implying a near zero per cent default. Moreover, giving women access to finance has emerged as a lucrative business for fund providers. The Global Banking Alliance for women has seen a steady upward trend in its profits, which has also put its operations on the path to sustainability,” he said.

The contribution of women to economic development is well documented. Yet there exists several barriers to the full optimisation of women’s economic potential. These ranges from cultural, to religious, traditional, and legal discrimination amongst others.

A recent publication by the Global Partnership for Financial Inclusion highlights that in developed countries, women are starting businesses at a faster rate than men, and are making significant contributions to job creation and economic growth. The same is true for transition economies, although the comparable rate of growth is slower.

In Indonesia, 2007 data showed that women-owned businesses grew at eight per cent, while men-owned businesses shrank 0.3 per cent. In Thailand women-owned businesses grew by 2.3 per cent while the male counterparts grew only by 0.3 per cent in 2008.

Nigeria: Endless waiting for micro finance development fund

By Hope Moses-Ashike, Business Day Online

The first half of 2012 has ended. The Microfinance Development Fund (MDF) or call it the Micro Small and Medium Enterprise (MSME) Fund which the Central Bank of Nigeria (CBN) pronounced to set up to support microfinance banks is yet to be implemented.

This raises concern among operators of microfinance banks who are asking when this fund will be established. All efforts to get the CBN to respond to this puzzle proved abortive. However, operators of microfinance are therefore praying that the regulatory authority will respond to the development before the end of next quarter.

Operators in a communiqué by participants at the certification programme of non-executive directors of microfinance banks organised by CBN, NDIC and FITC in Lagos, observed that a number of initiatives on funding embarked upon by the CBN and government including some state government have been in the pipeline for too long while the operators have waited endlessly for support.

“We hope that the Microfinance Development Fund (MDF) proposed in paragraph 6.10 of the new Policy Framework will be set up immediately. Part of the reason why this is urgent is because of the overwhelming need for a business rescue mechanism for micro finance banks similar to AMCON,” the communiqué stated.

Recently, the CBN changed the microfinance development fund to MSME fund. Irrespective of the change in name, the question that begs for answer is, “when will the fund be established?”

Abimbola Abimbola Adewale, managing director, GTI Microfinance Bank Limited, Lagos, said the microfinance development fund would definitely be established considering its importance in the growth of the industry.

He said the attention of the regulatory authority was high on the fund as it has continued to echo its implementation. “It will be set up very soon. You cannot undermine the importance of the fund,” Adewale said.

According to him, if the fund is finally established, it will enable operators to reach the low income earners as expected. He believes that the fund will come in single digit interest rate which will translate to lending to the poor business people at lower interest rate. “Hopefully, by or before the end of the second quarter, something will be done in that direction,” he said.

The CBN at the sixth Annual Microfinance Conference and Entrepreneurship awards held recently in Abuja said the microfinance development fund would be established in 2012 and will include both commercial and social components that will enhance its operations and outreach. The fund will also aim at improving access to affordable and sustainable sources of finance by microfinance institutions and microfinance banks.

This being the second time that the CBN is making such pronouncement, the first one was pronounced at the 5th Annual Microfinance Conference and Entrepreneurship Awards in 2011, where Kingsley Moghalu, deputy governor, financial system stability, CBN, said the apex bank would establish a microfinance development fund to promote accessibility to financial services for low income earners.

President Goodluck Jonathan also said at the conference that the fund would accelerate the nation’s real Gross Domestic Product (GDP) growth, register increased investment, revive and grow the agricultural sector, create additional employment opportunities and particularly reduce the rising poverty rate in the country.

Initially, when this fund was pronounced, Lanre Abiola, chairman, Gold Microfinance bank limited, Lagos, said the Federal Government’s pronouncement was a good development because it wuold help in solving the liquidity problem in the sub-sector and increase clientele base. He said majority of microfinance banks were suffering from liquidity problems. “This means more money, more business. The MDF will make sure microfinance banks have enough funds to serve their clients and there will not be collapse of the sub-sector,” he said.

Speaking with BusinessDay recently, he said the Federal Government should give attention to the suffering of the poor masses as well as security issues. He added that the government should wake up and implement its pronouncement.
To Godwin Ehigiamusoe, managing director, Lift Above Poverty Organisation (LAPO) Microfinance Bank Limited, the nature of such Fund has two key issues which include “who will fund it? Is it the government alone or various stakeholders? If it is government alone, then sustainability will be key.”

Nigeria: Microfinance Banks to face stress test before accessing funds

By Nduka Chiejina and Adeola Adeyoye, The Nation

The Federal Government will assess Micro, Small and Medium Enterprises (MSMEs) and Micro Finance Banks to determine their viability, before they would be eligible to access funds from the MSMEs development funds and the N200 billion Small and Medium Enterprise Credit Guarantee Scheme (SMECGS), the Minister of State for Finance, Dr. Yerima Lawan Ngama, has said.

Ngana, who spoke at the Annual Lecture of Microfinance banks in Abuja, yesterday, said the development funds and the N200 billion SMECGS, were established for the sub sector and they are available to eligible institutions.

Despite the September 2010 mass liquidation of 103 microfinance banks, the minister lamented that the challenges are still noticeable.

The minister who was represented by the Executive Director, Operations, Nigeria Deposit Insurance Corporation (NDIC), Prince Erediuwa, said, “drawing rights for both funds will be based on viability of the applying institution.”

He said the Central Bank of Nigeria (CBN) and other relevant agencies of the government, will come out with a clear policy/framework for eligibility.

In his presentation, the CBN governor Mallam Sanusi Lamido Sanusi represented by Mr. A. A. Sowunmi, Deputy Director in charge of microfinance issues, said the apex bank has proposed the establishment of the MSME Development Fund to provide liquidity support for MFBs.

The fund he said will cover refinancing, guarantee and wholesale facilities through various windows to support the MFBs to lend to entrepreneurs adding that arrangements to establish the Fund is at an advanced stage.

Nigeria: CBN says enterprises fund not to bailout microfinance banks

The Central Bank of Nigeria (CBN) at the weekend said that the Micro, Small and Medium Enterprises Development (MSMEs) fund was not meant to bail out distressed micro-finance banks.
The Director, Other Financial Institutions Development (OFID) department of the CBN, Mr. Olufemi Fabanwo, made the clarification at the 2nd Annual General Meeting (AGM) of the National Association of Micro Finance Banks (NAMB) in Abuja.

Fabanwo said the fund, which was initially established as Micro Finance Development Fund (MDF), was changed to MSMEs Development Fund.

“The MSMEs fund is not medicine for those who are weak, the MSME fund is going to be assessed by institutions that have shown proven record of performance; it is not for any micro finance bank.
“It is not a bailout fund. There is going to be a social window for capacity building in any area that will augur well for the development of the sub-sector.’’

The director said CBN was not satisfied with the level of returns rendition and the audited accounts of micro-finance banks. He said that only about 70 per cent rendition had been recorded by the apex bank since the end of the last financial year.

Fabanwo, however, added that the MFBs had recorded greater stability after the September ‘sanitation’ carried out by the apex bank in which 244 licences of MFBs were revoked. He stressed the need for micro-finance banks to update their subscriptions annually, warning that the apex bank would not hesitate to penalise defaulters.

Nigeria: Q1 ends, microfinance development fund not yet established

By Hope Moses-Ashik, Business Day Online

The first quarter of 2012 has ended. The Microfinance Development Fund (MDF), which the Central Bank of Nigeria (CBN) said would be set up to support microfinance banks, is yet to be implemented.

This raises concerns among operators of microfinance banks who are asking when the fund will be established. All efforts to get the CBN to respond to this puzzle proved abortive.

However, operators of microfinance banks are optimistic that the regulatory authority will respond to the development before the end of next quarter.

Abimbola Adewale, managing director, GTI Microfinance Bank Limited, Lagos, said the microfinance development fund would definitely be established, considering its importance in the growth of the industry.

He said the attention of the regulatory authority was high on the fund as it had continued to echo its implementation. “It will be set up very soon. You cannot undermine the importance of the fund,” Adewale said.

According to him, if the fund is finally established, it will enable operators to reach the low income earners as expected. He believes that the fund will come in single digit interest rate which will translate to lending to the poor business people at lower interest rate. “Hopefully, before the end of the second quarter something will be done in that direction,” he said.

The CBN at the sixth Annual Microfinance Conference and Entrepreneurship Awards held recently in Abuja said the microfinance development fund would be established in 2012 and would include both commercial and social components that would enhance its operations and outreach. The fund will also aim at improving access to affordable and sustainable sources of finance by microfinance institutions and microfinance banks.

This, being the second time that the CBN is making such pronouncement, the first one was pronounced at the 5th Annual Microfinance Conference and Entrepreneurship Awards in 2011, where Kingsley Moghalu, the deputy governor, financial system stability said the CBN would establish a microfinance development fund to promote accessibility to financial services for low income earners.

President Goodluck Jonathan also said at the conference that the fund would accelerate the nation’s real Gross Domestic Product (GDP) growth, register increased investment, revive and grow the agricultural sector, create additional employment opportunities and particularly reduce the rising poverty rate in the country.

Initially, when this fund was pronounced, Lanre Abiola, chairman, Gold Microfinance Bank Limited, Lagos, said the Federal Government’s pronouncement was a good development because, according to him, it would help in solving the liquidity problem in the sub-sector and increase client base. He said majority of microfinance banks were suffering from liquidity problems. “This means more money, more business. The MDF will make sure microfinance banks have enough funds to serve their clients and there will not be collapse of the sub-sector,” Abiola said.

Speaking with BusinessDay recently, he said the Federal Government should give attention to the suffering poor masses as well as security issues. He added that government should wake up and implement its pronouncement.

To Godwin Ehigiamusoe, managing director, Lift Above Poverty Organisation (LAPO) Microfinance Bank Limited, the nature of such Fund has two key issues which include “who will fund it? Is it the government alone or various stakeholders? If it is government alone, then sustainability will be key? The CBN will be in a better position to say why it has not been established and when exactly it will be set up.”

CBN mulls establishment of Microfinance Development Fund

By Collins Nweze, The Nation

The Central Bank of Nigeria (CBN) is considering the establishment of a Microfinance Development Fund (MDF) as a further step to deepen the financial market, the Governor, Sanusi Lamido Sanusi has said.

In a statement tagged: “The Nigerian Financial System: Regulatory Trends, Opportunities and Challenges,” Sanusi, explained that the apex bank is working on deepening the financial markets through the introduction of new products and appropriate control structures.

The MDF when established, would assist in addressing teething challenges of underfunding for microfinance institutions in the country. It will further complement past and current efforts aimed at strengthening the microfinance sub-sector of the financial system, improve financial inclusion and by implication, improve the nation’s Gross Domestic Product (GDP) rate significantly, the statement indicated.

Sanusi said efforts are being made to consolidate on the achievements recorded so far by the in the development of micro finance banks, by strengthening the regulatory frameworks and other guidelines. This also includes formation of National Microfinance development Strategy with the United Nations Development Programme (UNDP) and the recent signing of a major agreement with the Alliance for a Green Revolution in Africa (AGRA).

To strengthen the microfinance subs-sector, he said CBN has also instituted new guidelines for their operations. Under the new rule, microfinance banks would operate under three categories, which include Unit, State and National Microfinance banks.

A unit of the bank is authorised to operate in one location without branches/cash centres and is required to have a minimum paid up capital of N20 million. The state microfinance bank is expected to have a minimum paid up capital of N100 million. It is equally allowed to open branches within the same state or the Federal Capital Territory (FCT).

But the national microfinance bank, is authorised to operate in more than one state, including the FCT. It is required to have a minimum paid up capital of N2 billion and is allowed to open branches in all states of the federation and the FCT, although subject to prior written approval by the CBN. This, the CBN said, would strengthen the balance sheet of microfinance banks and create better opportunity for them to key into new businesses under better risk management procedures.

Meanwhile, Sanusi said the Nigerian market offers good banking, business and advisory opportunities for firms with an appetite for Sub-Saharan Africa, adding that the CBN intends to push for the enactment of four bills by the National Assembly to tighten financial sector regulations.

The bills are the Electronic Transaction Bill which when passed into law, will give effect to the admission in evidence of all electronically generated statements of account which the Evidence Act currently forbids, the Financial Ombudsman Bill needed to facilitate faster resolution of financial disputes.

Nigeria: MFBs looking forward to CBN’s low interest fund

By Hope Moses-Ashike, Business Day Africa

One year after the non- implementation of the first pronouncement to set up microfinance development fund for microfinance banks in the country, the Central Bank of Nigeria (CBN) has again made a watery offer to support the sub-sector financially this year.

This has again raised the hope of operators of microfinance banks as they look forward to accessing the fund. The implication is that if the CBN sets up the fund, microfinance banks will be able access the fund at a reduced interest rate and be able also to disburse to their customers at low interest rate.

The CBN at the sixth Annual Microfinance Conference and Entrepreneurship awards held recently in Abuja said the microfinance development fund would be established in 2012 and will include both commercial and social components that will enhance its operations and outreach. The fund will also aim at improving access to affordable and sustainable sources of finance by microfinance institutions and microfinance banks.

The question is, having failed in implementing its pronouncement last year; will the CBN do so this year?
While some operators believe that the CBN will establish the fund this year as promised, others do not. Sunny Akhamiokhor, managing director of Support Microfinance Bank Limited, said since the CBN has not given any microfinance bank any money from the N54 billion in micro credit fund, it will not set up the microfinance development fund.

Olufemi Babajide, chairman, National Association of Microfinance Banks (NAMB) Lagos chapter, believes that the CBN will fulfill its promise this time aroubd, adding that it concentrated on capacity building of microfinance banks last year.
He affirmed that the CBN has promised to give commercial support to microfinance banks to enable them have access to fund at a reduced interest rate.

In 2011, at the 5th Annual Conference and Entrepreneurship Awards held in Abuja, the Federal Government pledged to support the CBN in setting up Microfinance Development Fund (MDF) that would boost access to credit for small businesses and in turn drive economic growth.

President Goodluck Jonathan said at the conference that the fund would accelerate the nation’s real Gross Domestic Product (GDP) growth, register increased investment, revive and grow the agricultural sector, create additional employment opportunities and particularly reduce the rising poverty rate in the country.

Incidentally, the same conference for this year will be held February, one year after the  announcement  was made.
BusinessDay gathered that liquidity problem has bedeviled the sub-sector overtime, which the pronounced establishment of MDF would have taken care of.

When this pronouncement was made, expectations of operators was that implementation of the fund would enable them access cheap funds for on lending to the poor but economically active people.
Now, could it mean that their hope for the fund has been forever dashed or that the Federal Government will fulfill its promise come next month at the upcoming conference, rekindling their hope?

At the time of the pronouncement, Lanre Abiola, chairman of Gold Microfinance Bank Limited, Lagos, said the Federal Government’s pronouncement is a good development because it will help in solving the liquidity problem in the sub-sector and increase client base. He said majority of microfinance banks are suffering from liquidity problems.

“This means more money, more business. The MDF will make sure microfinance banks have enough funds to serve their clients and there will not be collapse of the sub-sector,” Abiola said.

Nigeria: Banking the unbanked, still the CBN’s major hurdle

By Onyinye Nwachukwu, Business Day Online

Reducing the huge population of Nigerians who still lack access to financial services is certainly a major challenge facing the Central Bank of Nigeria (CBN), particularly as it tries to create a robust banking sector and drive one of its mandate of promoting a sound financial system and fostering Nigeria’s economic growth.

Although a global phenomenon, Nigeria is one of African countries habouring huge number of its citizens with greater number of population without access to financial services. According to Kofi Annan, former United Nation’s Secretary-General, “The stark reality is that most poor people in the world still lack access to sustainable financial services, whether it is savings, credit or insurance. The great challenge before us is to address the constraints that exclude people from full participation in the financial sector.”

Financial exclusion is the unavailability of banking services to people living in poverty. It is believed to be one factor preventing poor people from exiting poverty, by forcing them to manage their finances on a cash-basis only and restricting their access to equitable sources of credit. Financial exclusion can therefore make poor people vulnerable to loan sharks.

Unfortunately, robust economic growth cannot be achieved without putting in place well-focused programmes that increase access of poor and low income earners to factors of production, especially credit. Microfinance is about providing financial services to the poor who are traditionally not served by the conventional financial institutions.

For instance, a study by the Enhancing Financial Innovation & Access (EFInA) in 2010 revealed a marginal increase of those served by formal financial market from 35 percent in 2005 to 36.3 percent in 2010, five years after the launching of the microfinance policy.

But, when those that had financial services from the informal sector such as savings clubs/pools, ‘Esusu, Ajo,’ and money lenders were included, the total access percentage for 2010 was 53.7 percent, which means that 46.3 percent or 39.2 million adult population were financially excluded in Nigeria. Nigeria ranked below South Africa, Kenya and Bostwana with 26.0 percent, 32.7 percent, and 33 percent, respectively.

The survey, EFInA ‘Access to Financial Services in Nigeria 2010,’ showed that the main barriers why people do not have bank accounts include unsteady income, unemployment and distance to bank branches.
To further buttress the high level of financial exclusion in the country, Sanusi Lamido Sanusi , the CBN governor, puts the ratio of bank branch to the total population at 24, 224 persons.

According to him, there were 24 deposit money banks with 5,789 branches and 816 microfinance banks, bringing the total bank branches to 6,605, indicating a high level of financial exclusion. Financial inclusion, the opposite of exclusion or inclusive financing, is the delivery of financial services at affordable costs to sections of disadvantaged and low income segments of society. Unrestrained access to public goods and services is the sine qua non of an open and efficient society.

It is argued that as banking services are in the nature of public good, it is essential that availability of banking and payment services to the entire population without discrimination is the prime objective of public policy.
The term “financial inclusion” has gained importance since the early 2000s, and is a result of findings about financial exclusion and its direct correlation to poverty.

Financial inclusion is now a common objective for many central banks among the developing nations, particularly as it remains a major factor in driving economic growth they are committed to.
Against this backdrop, the apex bank revised the 2005 Microfinance Policy, Regulatory and Supervisory Framework for Nigeria in April, 2011.

Besides, it has undertaken a number of strategic initiatives, including a commitment at the 2011 Alliance for Financial Inclusion (AFI) Global Policy Forum held in Mexico, to reduce Nigeria’s financial exclusion rate from 46.3 percent to 20 percent by 2020.

Other strategies include, the conclusion of the National Microfinance Development Strategy (NMDS) – a roadmap to guide orderly growth in the industry and enable microfinance institutions (MFIs) and MFBs to be viable to attract investments and enrich its monetary policy projections and enhance transmission mechanism.

The CBN also developed the National Financial Inclusion Strategy (FIS) that will further facilitate access to the otherwise disadvantaged groups like the farmers, women, aged citizens, self-employed, jobless school leavers, and SMEs considered by banks as costly, risky and unviable.

Sanusi said that the microfinance development fund (MDF) would be established in 2012 to improve access to affordable and sustainable source of finance by microfinance institutions and microfinance banks.
He is hopeful that the Cashless Nigeria Initiative, which commenced in Lagos in January 2012 and would be flagged off in other states of the federation, would further boost the payment system and improve access to financial services.

In his view, Modupe Ladipo, CEO, EFInA, recommends that in order to achieve universal access to financial services, banks will need to adapt their systems to low-value, high volume transactional environment with numerous points of access, at which people can conveniently conduct financial transactions.

Nigeria: Microfinance banks to construct 500 houses

BY Michael Eboh, Vanguard

Microfinance Banks in Lagos, under the auspices of the National Association of Microfinance Banks, Lagos State Chapter, NAMBLAG, have pledged to undertake a micro-housing project that will see them catering for the housing needs of a vast majority of the low income earners in the society.

Chairman of the Association, Mr. Olufemi Babajide, in his address to members in the report for the 2010 financial year, said the association plans to build 500 houses for the active poor with flexible and affordable repayment plan.

He disclosed that NAMBLAG has opened discussions with a financier that is willing to support the Micro Housing project.

Babajide said the project has been structured to ensure that the cost of constructing the houses will be affording and at little cost to beneficiaries.

According to him, beneficiaries of the housing project will be expected to make a monthly repayment of not more than N12,500 over a period of 20 years.

Speaking further, he lamented the dearth of funding support for microfinance banks in Lagos State, saying that the funds provided by the promoters and shareholders of Microfinance Banks are not adequate for the banks to increase their reach out to all the active poor that they intend providing banking services to.

“We, therefore, as a matter of urgency need funding from the Central Bank of Nigeria’s Microfinance Development Fund, Lagos State Government’s funds, local and international funds providers.

“More importantly, funds meant for poverty alleviation in any form by any tier of government or agency of government should be disbursed through microfinance banks.

“This will ensure effective channeling, monitoring and repayment. This approach will ensure the sustainability and continuity of such a programme.

He, however, said NAMBLAG has in place a Trust Fund that provides support funds to microfinance banks, adding that it provides short term liquidity to microfinance banks whenever the need arises.

“In the medium term, it provides finance and refinancing facilities to our members. The fund is managed by the trio of trust fund manager, trust fund custodian and executive committee of the fund. The fund will be contributory by members. Donors & Development Finance Institutions, DFIs will be approached to contribute into the fund,” he added.

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