Enabling Environment, Capacity Drive MFIs – CBN

 

Enabling Environment, Capacity Drive MFIs – CBN

Sanusi Lamido Sanusi

 

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Posted 13 September 2011, by Amaka Ifeakandu, Leadership (Leadership Newspaper Group), leadership.ng

 

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Central Bank of Nigeria has listed enabling environment,constant training and capacity building as the major factors that would help to drive the growth of Micro-finance institutions in the country.

The CBN governor, Sanusi Lamido Sanusi, who made this remark in Lagos at a one-day seminar, said that the apex bank had taken various steps to develop the sub-sector because of the strategic importance of eliminating poverty at the grassroots and developing the economy.

Sanusi who was represented by the Director, Development Finance Department (DFD), Paul Eluhaiwe, noted that what the microfinance sub-sector needed was the right environment, training and capacity building, adding that the apex bank had trained over 200 examiners to assess the microfinance with a view to enhancing its efficiency.

Eluhaiwe said the microfinance bank sector, had gone through series of reforms in the country, adding that recently, the apex bank set new operating guidelines that would enable the sector operate and contribute to the economic growth of the country.

The policy according to him, seeks to harmonise operating standards and provide a strategic platform for the evolution of microfinance institutions particularly MFBs. Existing non-deposit taking service providers, which continue to operate outside the purview of regulation and supervision of the CBN, would be encouraged to make periodic returns on their operations for statistical purposes to the CBN.

The apex bank said the policy would enhance the provision of diversified microfinance services on a sustainable basis for the economically active poor and low income households. It would also provide appropriate machinery for tracking the activities of development partners and other non-bank service providers in the microfinance sub-sector of the Nigerian economy.

According to a CBN circular dated April 29, the MfBs are meant to enhance the access of micro- entrepreneurs and low income households to financial services sector to enable them contribute to the growth of the economy.
Microfinance services refer to loans, deposits, insurance, fund transfer and other ancillary non-financial products targeted at low-income clients.

The CBN said that before the emergence of MfBs, the people that were unserved or under-served by formal financial institutions usually found succour in non-governmental organisation-microfinance institutions (NGO-MFIs), moneylenders, friends, relatives, credit unions among others.

Also speaking at the seminar, the founder of Grameen Bank of Bangladesh, Professor Muhammed Yunus, recounted the success story of the bank in his native country, stating that it has achieved its objective of addressing poverty in the country.

Yunus, commonly regarded as banker to the poor, said the Grameen Bank has given loans to nearly seven million poor people, 97 per cent of whom are women in villages, adding that the bank gives collateral-free income generating loans, housing loans and micro-enterprises loans to poor families and offers a host of attractive savings, pension funds and insurance products to its members.

“In a cumulative way, the bank has given out loans totaling about $6.1 billion. The repayment rate is 98.28 per cent. Grameen Bank routinely makes profit. It is financially self-reliant and has not taken donor money since 1995. Deposits and own resources of the bank today amount to 155 per cent of all outstanding loans,” he said.

He maintained that to create a poverty free world was possible, stressing that poverty was not created by poor people.

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