Nigeria: Adult population access to MFBs swells by 4.6m

By Hope Moses-Ashike, Business Day Online

The number of adult population that have a microfinance bank account rose to 4.6 million or 5.2 percent in 2012 as against 3.2 million or 3.8 percent in 2010, representing 1.2 million increase, according to Enhancing Financial Innovation & Access (EFInA)’s access to financial services in Nigeria 2012 survey report.

A further breakdown shows that 56.4 percent out of the 4.6 million adult population are male and 43.6 percent are female while in 2010, 57.9 percent of 3.2 million adult population were male and 42.1 percent were female.

Analysts attribute the noticeable increase to restored confidence in the sub-sector after the 2010 tsunami that engulfed about 103 microfinance banks.

In 2010, target examination was conducted on 820 MFBs across the country by the Central Bank of Nigeria (CBN) and the Nigeria Deposit Insurance Corporation (NDIC) and a total of 224, representing 27 percent of MFBs were found to be ‘Terminally Distressed’ and ‘Technically Insolvent’ and/or had closed shop for at least six months according the CBN. Subsequently, the operating licences of the 224 MFBs that were found to be ‘Terminally

Distressed’ and ‘Technically Insolvent’ were revoked pursuant to S.12 of BOFIA 1991 (as amended).

The NDIC continued with the liquidation activities for the 103 microfinance banks whose licences were revoked in 2010 with the payment of insured deposits to depositors. The CBN continued to monitor the 121 microfinance banks whose licences were reinstated in 2010.

The CBN special examination of the institutions revealed that 76 had either fully recapitalised or been absorbed by other microfinance banks while 45 were still being monitored for the exact state of their financial health.

As of December 31, 2011, 880 microfinance banks, including 121 with provisional approvals were in operation.

However, there is huge untapped market for microfinance banks. EFInA report says 81.9 million adults have never had a Microfinance Bank account, of which 48.0 million adults would like to have a bank account.

The top factors which would most likely encourage them to open a microfinance bank account are understanding how microfinance banks work, understanding the benefits of having a microfinance bank account, when microfinance bank services meet their needs and when better loans are offered.

However, a lot of measures have been put in place by the regulators for development of microfinance sub-sector and to promote financial inclusion in the country.

For instance, in pursuant of the goal of promoting financial inclusion in Nigeria, a new financial inclusion strategy was launched on October 23, 2012. At the event, the CBN set out targets and commitments to financial inclusion reforms and initiatives.

On the heels of the National Financial Inclusion Strategy came the launch by the Federal Government of a N220 billion, Micro, Small and Medium Enterprises Development Fund, 60 percent of which will be earmarked for businesses managed by women at a singledigit interest rate.

Another initiative to promote financial inclusion in Nigeria is the cashless policy designed to bring low-cost, secure and convenient financial services to urban, semi-urban and rural areas across the country, especially through the mobile payment services among other initiatives.

Meanwhile, the National Association of Microfinance Banks (NAMB) Lagos chapter has consistently engaged its members in manpower development, targeted at covering 50 million market size, representing 65 percent of the underbanked in the country.
Microfinance banks hope to move to 20 percent relevance in the Nigerian economy from the present 0.9 percent.

According to Olufemi Babajide, chairman NAMB South West zone, the international community, the World Bank, International Finance Corporation (IFC), United Nations Development Programme (UNDP), United Nations Industrial Development Organisation (UNIDO) are concerned about Nigerian situation.

Nigeria: Renewable energy as alternative income for MFBs

By Hope Moses-Ashike, Business Day Online

China’s central government plans to spend 170 billion yuan ($27 billion) this year to promote energy conservation, emission reductions and renewable energy.
Also, about 30,000 small solar panels that can generate between 12 to 30 watts of renewable energy are in use in rural communities in Kenya. These solar panels power household appliances such as light, heating system, cooker and lamps among others.

Despite being a major fossil fuel producer and having an abundance of renewable energy sources, Nigeria is plagued by a persistent energy crisis characterised by inefficiency, poor quality and low access to energy resources.

The poor are especially vulnerable to paying higher prices for non renewable energy sources that are hazardous to their own health and the environment.

All these will soon be over as the National Association of Microfinance Banks Lagos (NAMBLAG) chapter is willing to partner Bank of Industry and United Nations Development Programme (UNDP) in the area of bringing renewable energy products to the door steps of their customers.

Operators say the introduction of renewable energy services into the microfinance sub-sector will mean alternative income opportunity to the industry.

Olufemi Babajide, chirman of the Association, believes that the renewable energy will help in poverty alleviation, improve the quality of life of the active under privilege, create opportunity for self employment, increase in microfinance outreach programme and support their linkage programme.

According to him, energy is very critical in human development. However, challenges of the present form of energy generation include high cost of distribution, very high cost of extraction/exploration and production, and increased cost and high risk of transportation.

Other major challenges include price volatility and high rate of emission of greenhouse of gases that harm the environment.

To him, there is the need to replace the present mode of energy generation with what is acclaimed to be the best form of energy generation which is cost effective and environmentally friendly. They are generated from sunlight, wind, rain geothermal heat plants, ocean waves and so on. He said the beauty of renewable energy was that they can carefully replaced and controlled. They have no risk of finishing.

In his brief remarks at the renewable energy finance training for microfinance institutions in Lagos, Babajide said about 16 percent of the global energy consumption comes from renewable. Wind power is growing massively worldwide; solar power growth is also on the increase. Renewable energy projects on small, medium and large scales are beginning to gain momentum in different parts of the world. They can be tailored made to suit rural and remote areas. Renewable energy has the ability to lift the poorest nations to new levels of prosperity.

“We need to deliver smooth, efficient and effective services. There is the need to add value to the lives and well being of our numerous clients and customers. This can only be achieved if we are innovative and forward looking in the sub-sector,” Babajide said.

Giving a brief update on the AtRE project, Lawal Gada, renewable energy manager, AtRE said the way forward for the project was to commence renewable energy project in Nigeria. Other ways, according to him are to eliminate all barriers for renewable energy funding in Nigeria and to link the renewable energy services providers with the financial institutions for funding.

Another way forward, he said, is to monitor and establish best practice in renewable development in Nigeria and to collaborate and network with other institutions with common goals, among others.
The UNDP/BOI Access to Renewable energy (AtRE) project is a project initiated by the Bank of Industry (BoI) with the support of the UNGP

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 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.

Burma: Large demand for micro-credit in Burma

By Chiang Mai, Mizzima

Only about 10 per cent of the demand for small loans in Burma is being met, according to participants at a micro-finance workshop held recently in Rangoon.

The vast majority of those who do borrow are women.

The Microfinance Working Group in Burma held a best-practice workshop on August 16 to work out ways to provide more small loans to people, particularly in rural areas, according to a press statement recently released by the group.

About 70 participants attended the workshop including senior government officials, donors, UN staff, international and local NGOs and representatives from the private sector.

“In Myanmar [Burma], only 10 per cent of the total demand for micro-credit is met and the UNDP Microfinance Project is presently providing about 80 per cent of this micro-credit through PACT Myanmar, a non-profit organization,” said the United Nations Development Programme (UNDP) Resident Representative, Akbar Usmani. “Given the huge demand, the Microfinance Working Group is well placed to help further expand microfinance support services in Myanmar.”

Usmani said he welcomed the government’s latest initiative for rural development and poverty reduction under which micro-finance is one of the major components.

Micro-finance practitioners in Burma including the former deputy governor of the Central Bank, Than Lwin, PACT Myanmar, Groupe de Recherche et d’Echanges Technologiques (GRET), Save the Children, World Vision and UNDP shared their experiences on improving livelihoods through the creation of sustainable micro-finance services for poor rural communities.

As participants at the workshop made clear, the need for credit in the rural economy is substantial. Currently, the demand for micro‐credit in the rural segment of the Burmese economy is estimated at around US$ 470 million. Due to inadequate credit from the private and public banks, the rural poor rely on relatives or friends and money lenders as well as pawn shops for small loans, according to the press release.

Micro-finance loans and services provide a sustainable option for the poor by providing a diverse range of financial services, including savings, loans and some insurance products that support hundreds of thousands of micro-enterprises.

According to the Microfinance Working Group, offering loans with no collateral requirements and at interest rates well below those charged by informal moneylenders, affordable credit has been able to address the needs of more than 400,000 poor clients in a more economical manner.

From its infancy in July 1997, through the end of September 2010, the UNDP’s Microfinance Project has grown to become one of the 23 largest micro-finance projects in the world with more than 400,000 clients and with a loan portfolio of 36 billion kyat (approx. US$ 52 million). Its loan repayment rate has constantly attained a percentage of 98 per cent or higher. Women constitute 97 per cent of its clientele.

The Microfinance Working Group was formed in 2004, by local and international NGOs, in collaboration with the UNDP.

MYANMAR: Government open to microcredit expansion

From IRIN

Myanmar President Thein Sein’s statement in May that a sustainable microfinance system should be established has sparked interest among aid workers and those already involved in the country’s embryonic microfinance system.

The president made the announcement at a rural development and poverty alleviation workshop where he acknowledged the country’s poor are concentrated outside the cities and in need of assistance.

“We expect [from the president’s statement] that we would be able to work more broadly in the future,” said Maung Maung, general manager of international NGO Pact which recently hosted Myanmar’s largest microfinance project. As of March, Pact had 478,404 clients in 22 townships from three zones – Delta, Dry and Shan.

More than 85 percent of rural households in Myanmar rely on loans from multiple sources to meet basic needs, according to the UN Development Programme (UNDP), which brought microcredit lending to the country in 1997.

“The need for credit in the rural economy is substantial,” Akbar Usmani, acting UNDP resident representative, told IRIN. He estimated the present demand for loans in rural Myanmar at around US$340-471 million per year.

Current microfinance activities in Myanmar are conducted on the basis of specific authorizations provided to microfinance actors. These take the form of a set of Memoranda of Understanding (MoUs) signed by the various microfinance actors with their line-ministry.

Microfinance is, therefore, not yet mainstreamed into a regulated financial sector, but is rather authorized on a case-by-case basis by the government. There is no specific microfinance regulation in Myanmar, according to a 2010 microfinance industry report published by France-based NGO ACTED and the Banking with the Poor Network in collaboration with the Foundation for Development Cooperation.

Both Maung Maung and the UNDP’s Usmani agreed that a strengthened legal framework could fortify and sustain microfinance lending in this agriculture-based country, where 70 percent of the population live in rural areas and about 26 percent below the poverty line, according to UNDP’s country-wide survey conducted in 2009 to 2010.

Guessing game

Still, no one knows what form the rules and regulations will take, and agencies are wondering how the government will amend current restrictions on lending from financial institutions. A law passed in 1990 forbade both state and privately-owned banks from providing uncollateralized credit.

This means all bank credit has to be backed by either real estate or by a fixed deposit account, which always worries agencies that rely on donor funds to run their projects.

“How can we borrow money from the [local] banks, when we have nothing to collateralize?” said Nyunt Hlaing, executive committee member of Myanmar Business Executives Association, which is one of the local groups engaging in the microfinance sector. “This is a big challenge in expanding and sustaining the projects for the long-run.”

In the absence of access to institutional credit from the private and public banks, the rural poor rely on relatives, friends, moneylenders and pawn shops for small loans which charge interest rates as high as 60-200 percent a year.

UNDP introduced microfinance to Myanmar in 1997 using the Grameen model of group-based lending in which typically a small group takes on the responsibility of repaying the debt. The initiative was originally implemented through several sub-organizations, but in 2006, Pact took over all of UNDP’s microfinance programmes.

Several other government-sponsored groups, semi-governmental organizations and local and international NGOs have microfinance projects thanks to individual MoUs with the government.

There are institutional microfinancing lenders in 46 of the country’s 330 townships, and according to UNDP, only 10 percent of Myanmar’s demand has been met.

Experts and economists believe that poverty could be effectively reduced if modern rules and regulations are implemented for the microfinancing sector.

Barclays to Assist 60,000 People in Africa Anti-Poverty Effort

United Nations Development Programme

New York and London — Around 60,000 people in Kenya, Ghana, Tanzania and Uganda will soon have access to financial services through Barclays’ commitment to the Business Call to Action (BCtA) ―a global initiative aimed at supporting the private sector’s efforts to fight poverty.

Barclays’ pledge is part of the bank’s three-year, £10 million Banking on Change initiative, which seeks to improve the quality of life for poor people by extending and developing access to basic financial services in 11 countries in Africa, Asia, and South America, working in partnership with CARE International and Plan International.

“Extending access to banking and financial services within low-income communities allows poor people to manage their money more efficiently and effectively and creates new opportunities for inclusive economic growth,” said Natalie Africa, Programme Manager of the Business Call to Action. “In Africa, where up to 80 percent of the population is under or un-banked, this initiative has the potential to overcome some of the most significant barriers to financial inclusion and sustainable development.”

Through Banking on Change, Barclays, CARE International and Plan International are supporting financial inclusion of low-income communities primarily through Village Savings and Loan Associations, and by providing low-income communities with advice and training on how to manage their accounts.

Members pool savings into an interest-bearing fund from which they can then borrow. They also vote on how many loans are disbursed, their amounts and their repayment dates. The associations, which average 10 to 30 members, are located in areas not typically serviced by banks.

Through the BCtA commitment, Barclays will support around 60,000 low-income customers in the associations to graduate to the formal financial sector by providing special banking accounts customised to fit the specific needs of these groups.

By helping these groups to put their savings in additional interest-bearing, no-minimum deposit accounts, Barclays is making the process of saving money safer and more efficient for qualifying associations.

Association members can be assured that their savings are kept in a secure place and detailed transaction information helps them keep better track of account history. Furthermore, Barclays provides customers with specialised support in account management.

“For Barclays, the Banking on Change initiative isn’t just a philanthropic exercise —it has real commercial and business value,” said Chen Wong, Banking on Change Programme Manager for Barclays. “Through this commitment to the Business Call to Action, we will work with CARE and Plan to develop a robust microfinance model which is capable of being scaled up and rolled out across different countries. This initiative will help pave the way for formal financial services in the future.”

Launched in September 2008, the Banking on Change programme has formed 5,000 Village Savings and Loan Associations across 11 countries and enabled 99,629 people to have access to savings-led community financial services.

Microcredit to SMEs aids leasing business

By Collins Nweze, The Nation

Microcredit to small and medium-scale enterprises (SMEs) has been the driving force behind leasing business. The sector has given out over N1.6 trillion loans to SMEs based on the Central Bank of Nigeria (CBN) statistics. Besides, it has continued to promote adequate institutional arrangements to increase lending to SMEs, and advising more businesses to consider leasing as a viable alternative of sourcing for finance for their ventures.

CBN Deputy Governor, Financial System Stability, Kingsley Moghalu, said leasing was gaining ascendancy in all sectors of the economy, generating employment and enhancing tax revenues.

Speaking at a workshop tagged “Micro leasing: A prudent basis for micro credit”, organised by the Equipment Leasing Association of Nigeria (ELAN), in partnership with the CBN, United Nations Development Programme and World Bank, he said a lot more could be achieved if the major challenges, such as credit risk, hindering smooth process of granting credit for productive assets by lessors were overcome.

Moghalu, represented by Joseph Attah of the CBN, said microfinance activities are also deepened through leasing. He advised financial institutions to partner with leasing firms, saying there is sufficient business in the sector that demand commitment of their funds. Businesses ranked within the micro-leasing benchmark are those from $100 to $8,000.

Chairman of ELAN, Kehinde Lawson, said his group has over the years been promoting socio-economic development and growth through leasing. “The association remains committed to the development of a vibrant leasing industry that would provide the much-needed integral support to national economic growth,” he said, explaining that the dearth of funds for SMEs is accentuated by adverse environmental circumstances and the continued unwillingness of financial institutions to venture into this line of business. He stated that this underscores the need to give leasing the desired attention.

Lawson, said leasing is becoming an effective credit tool as it ensures that funds provided are used for the intended purpose as the lessor is responsible for the purchase of the equipment which is specifically lent out to the intended users. However, unlike other forms of finance, leasing finance cannot be reduced or withdrawn in the event of changing economic conditions.

“Leasing provides the opportunity for beneficiaries to use equipment without having to tie down money. As the business grows, the need for technological advancement and use of machinery increases. No collateral is required and entrepreneurs can start using the equipment without owning it. Also the burden of huge costs for purchase and maintenance is minimised and this increases cash flow for the entrepreneurs,” Lawson explained.

International Finance Corporation (IFC) Executive, Riadh Naouar, said it is much more difficult to alter lease payments due to changes in interest rates making it advantageous to borrowers, insisting that unlike other classes of loans, the interest component of repayment is not separately recognised. Where both lease and loan finance are available, it is usually much cheaper for small businesses to secure lease finance.

“Leasing, particularly to SMEs requires that financial institutions express confidence in the fact that there is sufficient business in the Nigerian market to profitably engage their equipment. They should equally back up the confidence by a willingness to take needed risks,” he advised. Operators say leasing requires understanding of the technicalities involved, and as such, efforts should be made to build skills of staff of leasing institutions, particularly on how to manage leasing risks.

He said globally, micro, small and medium-scale enterprises are being recognised as the driving force in the economic development in general, and welfare improvement in particular, and lease financing is being tipped as a major instrument in that direction. Leasing is regarded as the last resort. For instance, countries such as India, Pakistan, Ghana and Indonesia have utilised leasing as the pivot to promote micro entrepreneurship with remarkable measure of success.

Experts explain that financial leasing is a contractual arrangement between two parties, which allows one party (the lessee) to use an asset owned by the other (the lessor) in exchange for specified periodic payments. The lessee uses the asset and pays rental to the lessor, who legally owns it. The owner of the leased item expects the lessee to make lease payments by generating sufficient cash flow. This feature of leasing enables borrowers without credit history and collateral to access the use of capital equipment or other items. Leasing can be of three types, financial leasing, hire purchase and operating lease.

Micro entrepreneurs go for leasing because it is fast becoming a viable alternative to financing and helping to grow the economy. But taking the leasing business to the desired height, needs strengthening of strategies that will help mitigate the level of default in the industry. Lenders are therefore advised to demand for weekly, bi-weekly and monthly repayment plans to reduce default rate among borrowers.

Georgia Micro Loans

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In regions of Georgia left in tatters after its conflict with Russia over South Ossetia in 2008, a microfinance programme has given a second breath to residents still struggling to rebuild their lives.

With funding from the European Union (EU), the United Nations Development Programme (UNDP) teamed up with seven local microfinance institutions to assist displaced persons, women entrepreneurs, small-scale farmers, and other socially and economically vulnerable communities to start up small businesses.

“These loans were the perfect instrument to rekindle dragging local economies, using energy and creativity that were already here,” said Inita Paulovica, deputy head of UNDP Georgia. “From growing lilies to farming trout, start-ups have sprung to life by tapping into existing resources to create new opportunities.”

From July 2009 to June 2010, the programme issued more than 3,000 microloans to people living in the three regions of Georgia hit hardest by the armed conflict: Shida Kartli, Samegrelo and Mtskheta-Mtianeti.

The micro businesses — primarily in agriculture, trade and services — were financed with loans ranging from US$400 to $3,000. Altogether, the microloans totalled some $2.6 million.

For three-quarters of recipients, these were the first loans they had ever received, offering their first chances to succeed professionally and move forward to better lives.

More than half of the microloans went to women, and some 70 percent to small-scale farmers — a tenth of whom were internally displaced persons, uprooted during the war and unable to return to their home villages.

Dali Chilachava lives in a small town in Samegrelo, the region that borders breakaway Abkhazia and is home to more than 80,000 displaced persons. She fled from her village in Abkhazia in 1993 when the first separatist conflict broke out there. Unable to find a stable source of income, Chilachava’s family struggled in extreme poverty for 12 years, until they found their rescue in growing lilies for sale.

With a loan of $400 from the EU/UNDP programme, Chilachava and her husband improved the production of lilies in their greenhouse. The small family business now has a strong client base, shipping flowers in cigarette boxes to customers throughout Georgia, and they are thinking of applying for another loan to buy more land and build a cooling facility to store their flowers.

“We started four years ago with one little stem, and now you can see the result,” Chilachava said. “It is good to know you have a guaranteed income and your work pays off.”

More than 3,500 people — including many of the microloan recipients — have also taken part in hundreds of skills trainings and business consultations organized under the programme to assist them in designing and launching their own small businesses.

After fleeing her home village of Tamarasheni, which was almost completely destroyed during the conflict of 2008, Tea Babutsidze received her first loan of about $400 to open a small office in Gori, Shida Kartli.

The UNDP-sponsored training helped Babutsidze to design and launch her business, which provides other small businesses with online tax-declaration and bill-paying services, and helps them to photocopy documents.

“I feel more confident about my future,” Babutsidze said. “My business is small now, but it is getting on very well, and I am sure I will find ways to make it a really successful enterprise.”

The microfinance project was part of a broader, joint EU/UNDP program providing early recovery to impoverished households in conflict-affected parts of Georgia.

Launched in January 2009, that umbrella program also involved vocational education and training, as well as restoration of small- and medium-size infrastructure critical to creating economic opportunities, utilizing $5.7 million of EU funding over the course of 18 months.

The Poverty Time Bomb

From Daily Champion -

For a country blessed with so much natural endowments, the recent disclosure, that about 105 million Nigerians, or 70 percent of the population, are living below the poverty line, is both shameful and heartbreaking.

The Governor of the Central Bank of Nigeria (CBN), Mallam Sanusi Lamido Sanusi, who made the statement in Abuja at the Fifth Annual Micro-Finance and Micro-Entrepreneurship Awards, blamed the situation partly on lack of access to financial services, poor infrastructure, low income and social exclusion. He correctly pointed out that the situation is “unacceptable.”

Even without the benefit of statistics, what we can see on the streets today suggests that a higher percentage of Nigerians are, indeed, living below the poverty line.

Anywhere you go to in the country, poverty stares you boldly in the face. With the increasing rate of unemployment and under-employment, it is apparent that many Nigerians go to bed daily, some without at least, one balanced meal.

But while we are worried that the poverty level in the country has been allowed to rise so significantly over the years, we are even more scandalized by the obscene affluence that is so absurdly displayed side by side with this overwhelming level of misery.

It has remained part of the irony of Nigeria’s reality that only a tiny percentage of the populace has continued to pillage the commonwealth. To worsen the negative effects of their activities on the society, these few privileged elites have been brandishing their largely ill-gotten wealth with so much recklessness, thus assaulting the sensibilities of the majority poor and by so doing threatening the nation’s peace and social cohesion.

This sad situation must be redressed and this is why we urge governments at all levels to make haste to put in place all that would facilitate good governance which would, in turn, guarantee better conditions of living for the masses.

Just last November, the United Nations Development Programme (UNDP) in Abuja, released the 2010 Human Development Index report, which ranked Nigeria 142nd out of 169 countries.

This report, among other damning reports, confirms the alarming degree of poverty in the country, in the midst of offensive opulence.

This unfortunate state of affairs has gone on for years, literally unchallenged, and with little being done to address it wholistically. Ethnicity, religious dichotomy and such other distractions have been used by the elite in the past to deceive the people into misdirecting their anger at their fellow poor from other religious or ethnic groups, but one day, the poor -whether Yoruba, Igbo, Hausa, Fulani, Ijaw or Efik, would recognize that they belong to the same class of the poor and oppressed, and would, as one, respond accordingly.

Some recent developments in the polity such as the near mass rejection of the current state and federal legislators, rejection of zoning and the passion of the people to register en masse to vote in the April elections, point to the fact that the masses of Nigeria are already resolving that the old order, the status quo, must be toppled.

Government must, therefore, make concrete and urgent efforts to alleviate the sufferings of majority of Nigerians if they want peace and progress.

This should start from a resolve on the part of all stakeholders to ensure that the April polls are free and fair and devoid of divisive sentiments of religion or ethnicity.

Nigerian leaders must realize that the essence of government is to positively impact the people. They must come to terms with the fact that time would come and is already here, when the people would begin to insist on holding their leaders to account for their stewardship.

The people are beginning to ask questions concerning power, roads, healthcare, agriculture, education, potable water, the environment and other sectors where they realize that past governments, military and civilian, claim that several billions and trillions of dollars had been expended with little or nothing to show for the staggering expenditure.

They are beginning to realize that a lot of these resources have disappeared into private pockets while industries that should have given them and their children jobs have left the country due to the effects of bad governance.

And they are recognizing that the unemployment and mass poverty are what are driving youths to either join violent criminal groups or to desperately seek one-way tickets to all manner of countries where they can, at least, render menial services or engage in prostitution for pittance.

The Dr. Goodluck Jonathan government and all states and local governments must thus, recognize that they have the sacred duty of doing all in their power to reduce the frightening level of poverty in the country.

Indeed, it is in the interest of both the government and the governed to turn the tide because growing poverty in the land is a veritable time bomb that can explode anytime with devastating consequences, not only for the country but for the sub region and the continent as a whole.

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