The Central Bank of Nigeria (CBN) on Friday disclosed that aggregate loans granted by MFBs was N482.896 billion and that loan sizes that are below N 1.4 million accounted for 72 percent of the total.
Represented by Edward Lametek, deputy governor, corporate services, he observed that small businesses have been more successful in securing credit from the microfinance institutions than from conventional deposit money banks (DMBs).
According to him, data from the licensed credit bureaus indicate that the operations of micro finance banks have helped to improve financial inclusion amongst smallholder peasant farmers.
However, the challenges remain, inadequate spread in the location of the MFBs in relation to their target beneficiaries, demand for immoveable collaterals for loans, high interest rate, and absence of a credit reporting system.
“We are committed and working assiduously to address these limitations,” Emefiele said, adding that the Bank, in collaboration with other agencies of Government, is implementing various intervention schemes in addition to promoting microfinance.
The Bank, he said has since then worked towards increasing access to financial services for the economically active poor in order to enhance job creation and poverty reduction. The target is to increase the share of micro credit as percentage of total credit to at least 20 percent by 2020.
He said the CBN remains committed to the economic empowerment of disadvantaged groups including women and actively seeks to achieve this through the instrumentality of microfinance amongst other initiatives.
Tokunbo Martins, director, Other Financial Institutions Department, CBN, noted that the regulator is doing a lot to derisk the sub-sector by introducing collateral registry and credit bureau to enable them to lend to potential borrowers.
In his remarks, Ibrahim Dankwambo, governor of Gombe State said the State receives the second lowest amount from the federation account, and in spite of the low amount the state receives, it had been able to utilise it efficiently.
Represented by his deputy, Charles Iliya, he said the present administration had in the last eight years transformed the state by being prudent managers of scarce resources.
Speaking during the colloquium on the topic, ‘Real Sector Credit Delivery: Catalyst for Sustainable Economic Growth’, Isaac Okorafor, director, corporate communications department, expressed happiness that the CBN is working with the bankers committee, NIRSAL, and NIPOST to realize the national Microfinance bank project.
Responding to questions on loan refinancing, he said no refinancing is allowed rather through supply side they will push credit into the sector to bring down interest rate.
Source: By Hope Moses Ashike