The
total loan portfolio of microfinance banks operating in the country
stood at N97bn as of December 31, 2012, the President, National
Association of Microfinance Banks, Mr. Jethro Akun, has said.
Akun stated this in a presentation made
to the Managing Director, Nigerian Deposit Insurance Corporation, Alhaji
Umaru Ibrahim, when the executives of the association visited the NDIC
headquarters in Abuja on Wednesday.
He noted that the microfinance sector
had about five million borrowers, and had in the past few years,
contributed significantly to the economic development of the country.
For instance, the NAMB president said
between 2012 and now, 22,000 people had been employed in 1,732 branches
and cash centres of the MFBs.
Akun said with six million customers,
the total deposit of the sector had grown to N125bn, while the total
assets stood at N222bn.
He said the NDIC, under the leadership of Ibrahim, had introduced several initiatives that had helped to reposition the sector.
Some of the initiatives, according to
him, are the setting up of a N16bn special fund to augment any
foreseeable deficit in the premium expected from the MFBs; payment of
N2.50bn to 75,322 verified depositors of 93 out of the 103 closed MFBs
as of 2012; and the offer to provide on-lending package for the MFBs
having liquidity issues.
On the challenges facing the sector,
Akun said there was a need for the review of the policy on unit branches
to ensure the opening of more branches at the local government level.
“One of the challenges we are currently
confronting is the issue of banks having over 50 shareholders should
convert to Public Liability Company. We have already written to the
Corporate Affairs Commission that it should be optional and we are
awaiting their response,” he added.
He also said the association was
currently engaging the Federal Inland Revenue Service in order to work
on some areas of disagreement, which had been a problem to its members.
For instance, Akun said, “It was agreed
that the MFBs should be exempted from paying Value Added Tax and other
charges. We are pursuing these and other issues and we hope to resolve
them.”
He also called for the establishment of a private sector microfinance stabilisation fund to be managed by fund managers.
The association advocated the removal of
the National Poverty Eradication Programme funds from the balance sheet
of the MFBs, noting that this “has become a thorn in the flesh for most
of them.”
On the default rate of the MFBs in the
payment of insurance premium to the NDIC, Akun said, “The corporation
should develop an appropriate premium payment system by the MFBs that
will include punitive measures to defaulting banks and as a condition
for member banks before accessing the Micro, Small and Medium Enterprise
Development Fund as contained in the guideline.”
Ibrahim had threatened to withdraw
insurance cover from any microfinance bank that consistently failed to
pay its insurance premium.
He said about N398m had been received
from the sector as insurance premium, adding that N44m was still being
expected from about 100 MFBs.
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