Nigeria: Trustfund Micifinance Bank seeks CBN nod for state microfinance banking

By Idris Umar Momoh, Business Day Online

As part of its’ determination to financially empower the active poor members of the society, the management of Trustfund Microfinance Bank, one of the leading microfinance institutions in Edo State, has formally applied to the Central Bank of Nigeria, for a State Microfinance Bank licence.

Chairman, board of directors of the bank, Ehimatie Obazee, who made this known at the bank’s 10th Annual General Meeting in Benin City, at the weekend, said in the next two years the bank would expand its operations to many parts of the state.

Obazee disclosed that the bank intends to acquire necessary technologies and knowledge to render cashless services to its customers by 2013, just as he pointed out that it is among the first three microfinance banks in the South- South region to apply for state microfinance bank.

The board chairman further said that the bank, has 120 staff, and about 200 shareholders, and is determined to continuously grow its capital base which is a key performance enhancing factor in the microfinance industry.

He added that the bank was one of the institutions selected by the Federal Government, in the state for the execution of Rural Finance Institution Building Programme (RUFIN), a World Bank project.

While noting that the bank would continue to improve on its corporate governance, he however assured shareholders that the financial institution would be run professionally and in compliance with the regulatory rules.

Nigeria: RUFIN links 521 savings groups to MFBs – Coordinator

The Rural Finance Institution Building Programme (RUFIN) has linked about 521 savings and loans groups to Micro-Finance Banks (MFBs) in Benue, Mr Abayomi Seriki-Musa, its Zonal Coordinator, said on Thursday.

Seriki-Musa said this in Makurdi when the Supervision Mission led by Miss Atsuko Toda, the International Fund for Agricultural Development (IFAD) Country Programme Manager, monitoring RUFIN projects visited Makurdi.

RUFIN is a seven-year IFAD-assisted programme designed to improve the performance of non-bank rural finance institutions to enable them to develop to sustainable Rural Microfinance Institutions (RMFIs) in the programme participating states.

The goal of the Programme is to improve the income, food security and general living conditions of poor rural households, particularly women-headed households, youth and the physically challenged.

Seriki-Musa said that the zonal office, through the state coordinator, had developed a template for work plan and budget of the participating local governments in the zone.

According to him, the office also provides technical support to the savings and loans groups in the three participating local governments of Gboko, Otukpo and Logo.

He said that funding constituted a major challenge to the implementation of identified projects since the inception of the programme, noting that the state government had yet to pay its counterpart fund.

“Activities have been lined up for the local governments but funding has been affecting these activities; funding has been a challenge since the beginning of the project.”

In his remarks, Mr Ben Odoemena, the IFAD Country Programme Officer, said that the meeting was more of an implementation support mission.

He said IFAD was concerned about how the MFBs put to use the funds being given to them by RUFIN.

Odoemena also advised RUFIN to focus on mentoring MFBs that had not come on board the programme.

However, the leader of the supervision team, observed that the programme had made a lot of progress in the state.

SOURCE: Business Day Online

Nigeria: Nigeria is Africa’s largest microfinance market

From Business Day Online

Nuhu Danjuma, a finance consultant, says Nigeria is the largest microfinance market in Africa, but that the sector has never benefited from cheap capital. Danjuma, who spoke in Abuja on Thursday, said that high interest rate charged on loans by the microfinance banks was because they did not have adequate operating capital.

His consulting firm works for the state-run Rural Finance Institution Building Programme (RUFIN).

“Currently Nigeria is the biggest microfinance market in Africa; there has been little or no access to external capital, which is cheap and also gives the operators enough window to trade with,” he said. “If you look at the history of microfinance banks in Nigeria, this sector is one of the few sectors that has never benefited from any cheap capital. “In other countries you find out that the government sets aside funds for on-lending.

“The reason why there are high interest rates in the microfinance sector locally is that the cost of capital has been very high because first they don’t have enough capital.

“And second the little they get from local commercial banks is very high, therefore they also need to lend at a high rate.’’

Danjuma said the firm was organising the first Nigeria International Microfinance Investment Forum in partnership with Microfinance Association of the United Kingdom on the platform of the International Fund for Agricultural Development (IFAD) and RUFIN. The consultant explained that the forum would hold in July and would bring international investors to Nigeria. The investors, he added, would finance projects and give funds and grants to microfinance banks.

“This platform is to actually bring what we call microfinance investment vehicles to the country; these are funding agencies globally that are interested in microfinance banks,’’ he said.

He said the investors would partner with IFAD and other 400 microfinance institutions.

He added that 10 international microfinance funding agencies, five local funding agencies and operators from Gambia, Cameroun and India had showed interest in the forum.

RUFIN is an IFAD project aimed at reaching out to rural agricultural producers and NGOs through microfinance banks. Danjuma said the project had 43 financial institutions and 33 microfinance banks that were working with cooperatives in the field of agriculture to facilitate savings, increasing and boosting agricultural production in the rural areas.

He observed, however, that the 43 microfinance institutions were under-capitalised.

“We realised that these 43 microfinance institutions working under the IFAD-RUFIN projects are under-capitalized.

“They over-sensitised the market at the grass roots so they do not have enough funding to lend to these people.’’

Nigeria: FG Provides N1bn Finance for Rural Farmers

By Yemi Akinsuyi, This Day Live

In a renewed commitment to fast-track access to finance in rural part of the country, the Bank of Agriculture has injected N1 billion for on-lending to Micro Finance Banks (MFBs) in remote areas.

The National Project Coordinator for Rural Finance Institution building Programme (RUFIN), Alhaji Musibau Azeez, disclosed this in Abuja while presenting a communiqué issued at the end of a Financial Linkage forum organised by International Fund for Agricultural Development (IFAD) and RUFIN.

To facilitate access of the Micro Finance institutions to the N1 billion, Azeez disclosed that a committee has been set up on access to the fund, calling on the development banks to increase it.

He disclosed that the target of the IFAD RUFFIN project was to attain a sustainable rural financial system in 12 states of the federation, in which 36 Local Government Areas were selected, hinting that 33 rural MFBs had already benefited.

He stressed that the importance of the stakeholders meeting was to link commercial and development banks with selected Microfinance Institutions for refinancing their micro lending and also to increase access to finance in the rural areas by encouraging financial deepening.

The statement however stressed the need to facilitate the establishment of contact and involvement of RUFIN Microfinance banks to access the N450 billion Nigerian Incentive- Based risk Sharing System for Agricultural Lending (NISAL) that is being promoted by the Central Bank and AGRA.
They further harped on the need to get affirmative action from the LGA chairmen to provide some level of funding to the MFBs.

Noting the contribution of the Bank of Agriculture and Bank of Industry in the funding of some MFBs, the forum advised RUFIN to follow-up the One billion naira set aside or on lending, so that the MFBs can access the fund as soon as possible.

They enjoined the CBN to issue detailed guidelines on down scaling and financial linkage to assist and encourage Development Micro Finance Banks to actively pursue the programme of linkage and wholesale funding support to the financial institutions.

The statement further recommended that credit facilities to farmers and rural populace should be channelled through Micro Finance institutions across the country, appealing to that fund providers for Micro lending purposes to recognise the unique cash flow cycles for various farm products when structuring repayment cycles for agriculture lending.

They urged the RUFIN project to do a follow up the issue of interest rates between commercial Banks and MFBs on one hand, and the MFBS and Village savings Groups, Micro Finance Institutions and farmers groups on the other hand.

RUFIN Technical Adviser, Prof. Adeniyi Osuntogun, however urged micro finance institutions to make savings and deposit mobilisation important aspects of their activities, adding that increase access to finance through micro lending should be deepened.

Nigeria: MFBs disburse N66bn ($406m) in six months

BY Amaka Abayomi, Vanguard

THE Central Bank of Nigeria (CBN) has disclosed that loans and advances disbursed by micro-finance banks (MfBs) in the first half of year 2011 increased by 23.8 per cent to N65.5 billion, as against N52.9bn recorded at end-December 2010.

According to the Economic Report for the first half of 2011 released by the CBN, MfBs’ total assets and liabilities increased by 9.9 per cent to N187.2bn,  while their paid-up share capital and shareholders’ funds increased by 7.2 and 7.8 per cent over the levels in December 2010 to N44.5bn and N47.4bn, respectively.

“Investible funds available to the microfinance sub-sector amounted to N17.7bn, compared with N8.8bn at end-June 2010,” the Report said.

“The funds were sourced mainly from increases in deposit liabilities (N9.3bn), paid-up capital (N3.0bn) and long-term loans (N2.8bn); and were used mainly to increase loans and advances (N12.6bn), balances with banks (N2.8bn) and short-term investments (N2bn).”

Continuing, the Report stated that among the resolutions reached at the 5th Annual Micro-finance Conference and Entrepreneurship Awards which had 1,198 participants are: the huge benefits of micro-leasing and micro-insurance should be explored by MFBs/MFIs to deepen financial inclusion; MFBs should inculcate sound risk management practices and good corporate governance, design innovative products and financial literacy/education for their clients; the CBN should endeavour to enhance the financial literacy of MSMEs; and the CBN should align regulatory actions with other policies of government, for harmony, economic and financial stability.

Microfinance policy

Also, the key decisions reached at the 11th meeting of the National Microfinance Policy Consultative Committee (NMFPCC) held on January 8, 2011 were: the deferment of the sensitization exercise and the stoppage of licensing of new MfBs; training of operators in the first and third quarters of 2011; and commencement of operations of the microfinance rating agencies in the fourth quarter of 2011.

Of equal importance is the launch of the Rural Finance Institutions Building (RUFIN) Programme, an IFAD-assisted programme in Abuja in February 2011.

The participating agencies were the CBN, Bank of Agriculture, National Poverty Alleviation Agency (NAPEP) and the Federal Department of Co-operatives.

Furthermore, the CBN, RUFIN, the United Nations Development Programme (UNDP) and NBS met to harmonise the baseline surveys on the National Micro-finance Development Strategy (NMDS) and RUFIN.

The baseline survey would provide reliable and up-to-date database on the activities of the microfinance and rural finance sub-sector.

The pilot phase of the Entrepreneurship Development Centres (EDCs)  was completed by the consultants and the final report was submitted to the Management of the CBN.

This resulted to the establishment of State Entrepreneurship Development Satellite Centres in nine states and Abuja.

Already, 84,758 entrepreneurs, comprising 42,615 graduate trainees and other 42,143 trainees who were offered business advisory services, have been trained by the EDCs.

Nigeria: Bank of Agriculture (BOA) Gives N1bn ($6.2m) To MFBs

By Grace Azubuike, Leadership

As part of efforts to facilitate increased lending to the agriculture sector of the economy, the Bank of Agriculture (BOA), has given the sum of N1 billion to rural microfinance banks.
Speaking yesterday in Abuja at the financial linkage forum held by Rural Finance Institution Building Programme (RUFIN), the National Programme Coordinator RUFIN, Mallam Musibau Azeez, said that financial linkage was a good tool which provides the needed refinancing window for the agricultural and rural transformation in the country.

According to him, loans management strategy manual already developed by the National Programme for Agriculture and Food Security (NPFS), should be widely circulated in order to help microfinance banks develop best practices in on-lending arrangements.

He, however recommended that credit facilities to farmers and the srural populace should be channelled through MFBs across the country and that the existing cooperative lending institutions should be acknowledged and built upon in the design and implementation of rural financing programmes.

In his words: “In terms of disbursement of funds under the linkage programme, the existing farmers groups under the on-going donor projects namely: NPFS and FADAMA III, should be used to pilot the scheme and there should be need for capacity building training for MFBs on designing partnership and linkage service agreement.’’ Azeez said.

The coordinator assured that women were the major target group of the programme,adding that rural poor families would directly benefit from the financial services that would be improved in terms of quality, quantity and access to deposit, loan and transfer services.

Nigeria: Microfinance banks as mechanism to transform rural communities

From 234Next.com

Olusegun Ogidan, a micro finance specialist, has called on the federal government to consider using Micro Finance Banks (MFBs) as the mechanism to transform rural communities under its poverty alleviation programme.

Dr Ogidan made the call in a presentation at the ongoing 2011 Financial Linkage Forum in Abuja, organised by the Rural Finance Institution Building Programme (RUFIN), an IFAD-assisted programme.

He said that the success recorded with microfinance banks on fund disbursement to rural farmers in the 12 RUFIN states, showed that MFBs were the most credible channels for the rural poor to access funds.

The seven-year programme is being implemented in 36 local government areas across 12 states of Oyo, Lagos, Anambra, Imo, Nasarawa, Benue, Zamfara, Katsina, Adamawa,

Bauchi, Akwa Ibom and Edo.

RUFIN is being implemented with $27.2-million secured by the federal government from the International Fund for Agricultural Development (IFAD) and was designed as a poverty alleviation programme with focus mainly on women, youths and physically challenged people.

Ogidan said that RUFIN had proved that it was possible to establish microfinance linkage between the rural micro finance institutions, microfinance banks and deposit money banks.

According to him, the linkage has created a platform for the banks to mobilise enough funds to lend to the rural people and make life more meaningful to them.

Ogidan also noted that the lack of access to finance had been a major challenge against the development of rural enterprises in Nigeria.

He suggested that the three tiers of government should consider channelling agricultural and other funds on poverty alleviation through MFBs.

He said the MFBs already had a model which included a transparent monitoring instrument and liaison with cooperative societies that could be adapted to further negotiations on channelling of funds.

The choice of MFBs had become imperative because they were designed mainly to serve the purpose of the rural populace and in the process, had direct dealings with the rural populace, Ogidan said.

Also, Akin Akintola, the executive director, Community Development Foundation, said that in spite of the challenges associated with the microfinance strategy, it remained one of the most effective ways of reaching the large underserved rural population in Nigeria.

Mr Akintola noted that MFBs promote best practice in rural finance and strengthen local and grassroots financial institutions.

Ubokutom Nyah, managing director, Prudential Cooperative MFB, Ikpe Annang, Akwa Ibom State, said that to achieve the desired results in the areas of poverty eradication and rural development, funds must be made available to the rural poor.

Babale-Umaru Gire, the chairman, Standard Micro Finance, Yola, described RUFIN as one of the best programmes towards poverty eradication and the best way to connect the rural poor. He said that since the commencement of the programme, his bank had disbursed more than ₦12 million to 30 participating cooperative societies in the area.

Mr Gire said that RUFIN was achieving its objective of assisting the government to improve the standard of living and eradicating poverty mostly in the rural areas.

Mrs Olufunke Adeyoyin, an assistant general manager, Trust Fund MFB, Benin, noted that RUFIN had since inception been able to mobilise a lot of deposits in Orhionwon local government area.

“This local government had been abandoned in the rural development activities but since the inception of RUFIN, we have been able to carry them along and they have benefitted over ₦8 million from the bank disbursements,” Adedoyin said.

She also urged the government to consider expanding the programme to other parts of the country.

According to Chukwu Chike-Ettie, the director, Okigwe MFB, the bank had disbursed over ₦20 million to more than 100 beneficiaries facilitated by RUFIN.

He said that if more MFBs were brought on board, opportunities would be created for many more beneficiaries, thereby reducing the poverty level.

Alleviating poverty through rural agriculture

•Pawpaw farming

By Stella Odueme, Daily Independent -

Worried about the nation’s dependence on oil, many have advocated a paradigm shift to agriculture, another means to further boost the economy and reduce poverty.

They hinged their argument on the fact that rural-urban drift which at the end make majority of the youths roam the cities in search of jobs that are not available could be tamed if agriculture is made attractive and the rural areas equipped with basic infrastructures like electricity and good roads among others.

Local farmers are not able to go into mechanized farming as a result of paucity of funds occasioned by lack of access to rural credit and loans. They struggle to survive on the little they could do manually, most times to feed their families and very little to sell.

Investigations indicated that even those who produce enough to sell run into loses due to lack of storage facilities and bad roads to move the produces to the market.

In the bid to ensure that farmers have access to funds that the Federal Government and the International Fund for Agriculture Development (IFAD) through the Lagos State Ministry of Agriculture and Cooperatives held a three-day sensitization and awareness workshop on Rural Finance Institution Building Programme (RUFIN) with the aim of bringing together for action, relevant players in the RUFIN programme implementation in the participating Local Government Areas (LGAs) in Lagos State.

Declaring the workshop open, at the Ikorodu Local Government, the Permanent Secretary Lagos State Ministry of Agriculture and Cooperatives, Dr. Olajide Basorun, said RUFIN is an initiative embraced by the state government with the aim to reduce poverty level among the rural dwellers in the area of Agriculture and other agro-allied economic activities. He said government has been doing everything possible to improve food security and safety.

Basorun therefore urged the target beneficiary institutions to embrace and provide all needed support and cooperation on the implementation to make microfinance sustainable in Nigeria.

In his address,the Zonal Coordinator of RUFIN in the Middle Belt Zone, Mr. Musa Seriki said RUFIN is another enduring legacy of partnership between FG and IFAD, whose developmental objectives was to help small holder farmers and rural micro enterprises to have quality access to financial services in a sustainable manner.

He disclosed that RUFIN programme is being implemented through a loan agreement of $27.2 from IFAD and a grant of $0.5m from Ford Foundation.

He further explained that RUFIN, a seven-year intervention programme has specific objectives of developing and strengthening of rural microfinance institutions in all the selected areas, capacitating microfinance banks in the select LGAs, as well as establishment of linkages between the rural microfinance institutions and formal finance institutions.

He revealed other objectives to include creating of variable and sustainable rural financial institutions for integration into the mainstream financial system of the country and to also guarantee and refinance of credit facility to rural microfinance institutions to be provided by the microfinance banks through the commercial banks.

Earlier, the National Coordinator, FGN/IFAO RUFIN, Mr. Muyis Azeez revealed that current analysis of microfinance framework in Nigeria revealed that Rural Financial Institutions (MFIs) other than commercial bank operated mostly under poor and weak legal framework without adequate institutional support, adding that they are unable to overcome their fragmentation through effective collaboration and sharing of information.

Azeez who was represented by Head of ICT, Engr. Tunde Bello said that these MFIs are also confronted with the lack of adequate operational insight engendered by lack of an effective umbrella organisation.

He however explained that it was against this backdrop that FGN/IFAD RUFIN was being aimed at developing and enhancing existing institutional framework for provision of the much needed access to rural credit and loans by the farmers and other allied rural micro enterprises.

In his opening remark, Executive Chairman, Husitode Moses Dosu admonished farmers, artisans and the physically-challenged in Badagry to take advantage of RUFIN initiative to improve on their agricultural productivity and the economic activities of the youth in their various communities in order to reduce the unemployment situation in the state.

RUFIN programme is currently implemented in 12 states in the country and covers three LGA in participating states. As one of the leading participating states, it was learnt that Lagos State has paid its counterpart fund of 12million and has provided equipments, offices and competent manpower for the implementation of RUFIN Programme. The selected LGAs in the state are; Badagry, Epe and Ikorodu.

Nigeria’s apex bank organizes workshop for MFBs

From Panapress –

Lagos, Nigeria – In a bid to enhance the skills of operators of micro finance banks (MFBs) in Nigeria and enhance their supervisory role, the Central Bank of Nigeria (CBN) has finalized arrangements to hold a workshop from 1 to 6 November on electronic rendition of monthly returns, according to a statement from the apex bank, made available to PANA here.

‘The workshop is designed to familiarize operators with the new application de signed to capture and enhance accuracy of data received from MFBs,’ the statement explained.

About 830 participants from the 36 states and Abuja, the Nigerian federal capital, will participate in what the CBN said was ‘mandatory for officers responsible for the preparation and rendition of returns’ in the banks.

Meanwhile, the apex bank, in collaboration with the Rural Finance Institution Building Programme (RUFIN), has given its nod for the launching of the National Association of Microfinance Institutions (NAMI) in Nigeria, on 28 October in Abuja.

To this end, CBN and RUFIN will be meeting with officials of the zonal associations of unlicensed Microfinance Institutions (MFIs) from the six geo-political zones of Nigeria.

The association will create a platform for stakeholders’ support to enable members expand financial services to the economically active poor, particularly in the rural areas.