Following the proposed plan to establish a National Microfinance Bank using NIPOST outlets by the Central Bank of Nigeria (CBN) and the Bankers Committee, the National Association of Microfinance Banks has reviewed the decision and come up with its position.
In the National MFB establishment plan, the CBN and the Bankers Committee will utilise the sum of N5 billion as equity from N60 Billion Agri-Business Small and Medium Enterprises Investment Scheme (AGSMEIS) Fund, while NIPOST will contribute its offices in the 774 local governments.
The association is of the view that the decision runs counterproductive to the salient objectives of the National Microfinance Policy, Regulatory and Supervisory Framework for Nigeria as well as the objectives of the National Financial Inclusion Strategy.
In statement made available to BusinessDay, the leadership of NAMB led by Rogers Nwoke, president, said the CBN and the Bankers Committee should utilize existing touch points and offices of existing microfinance banks which meet approved criteria to disburse its intervention funds including but not limited to the ACGSMEIS, Micro Small and Medium Enterprises Development Fund (MSMEDF).
NAMB said equity Funds for the planned National Microfinance Bank should be channelled to support the NAMB initiative for a private sector led Microfinance Development Company Ltd to manage a Microfinance Development Fund as provided for in the National Microfinance Policy. This would be a sector-based source of wholesale funding and refinancing for the microfinance subsector.
According to the statement, the CBN and the Bankers Committee should consider a super agent banking license to NIPOST. NAMB is willing to partner with NIPOST as a super-agent for delivery of financial services across the 774 local government areas.
There is need for an urgent engagement and dialogue between NAMB and the Bankers Committee to consider modalities and options for optimal utilization of the various intervention funds, particularly, the ACGSMEIS Fund by microfinance banks and effective linkage between the commercial banks on the one hand, and microfinance banks on the other for the purpose of on-lending.
“We believe that the Bankers Committee is driven by a strong commitment to improve financial inclusion across the country; so equally does NAMB and its constituent microfinance banks. A strong collaboration is truly needed to sustain financial inclusion growth in Nigeria”, the statement reads.
Section 6.9 of the Revised National Microfinance Policy (2011) recognizes the importance of wholesale funds to microfinance institutions to enable them expand outreach. Pursuant to this, the Policy provides that the CBN shall work out modalities for fostering linkages between Deposit Money Banks (DMBs), Development Finance Institutions (DFIs), specialized finance Institutions, donor agencies and Microfinance Institutions (MFIs) in general and Microfinance Banks in particular, to enable the Microfinance Banks and MFIs source for wholesale Funds and refinancing facilities for on-lending to their clients.
This policy has not been implemented to support Microfinance Banks with needed wholesale funds. The delay to fulfill this role of creating appropriate linkages with DMBs and other wholesale financial institutions is most probably responsible for the non-disbursement of the intervention funds created for this purpose.
“We strongly advise that linkages that facilitate the flow of capital to the MSME sector should be put in place while all intervention funds meant for the development of the MSME sector be channelled through Microfinance Banks which meet well defined criteria. The Bankers Committee will achieve their objectives better and faster than going through the process of setting up a microfinance bank from the rubbles of dilapidated and rundown post offices nationwide”, NAMB leadership added.
Hope Moses-Ashike
