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MFBs operators criticise N50bn micro-credit fund as political gimmicks

By Amaka Agwuegbo

Operators in the  micro-finance  sector have criticized the N50 billion micro-credit fund set up by the Federal government as a political gimmick as only few microfinance banks have been able to access it.

In separate interviews with Vanguard they called  on the government and the regulatory authority to facilitate  access to  the N50 billion  micro-finance development fund, adding that states governments should make available the one  per cent of their annual budget for on-lending to MFBs to assist them in poverty alleviation, as required in the microfinance policy..

The Managing director of Citigate MFB, Mr. Phillip Okuabor, said the one  per cent fund that is supposed to come from the state and local governments is not forth coming, saying when the fund is made available, government decides which micro-finance banks it should be disbursed to.

“The state and local governments are supposed to set aside an amount not less than 1.0 per cent of their annual budget for on-lending  through the micro-finance banks. But none of the local governments have done so. At the state level, it has not been integrated and is being done haphazardly. The Federal Government’s N50 billion is not better, because we thought that the money will go through us, but we heard it would go through the state governments, making it a political gimmick. If MFBs are supposed to collect the money and they can’t decide who the money goes to, then there is a problem,” he stated

Also, the Managing Director of Bank of Industry MFB, Mr. Kevin Iyamu, stressed the need for MFBs to have access to the N50bn fund so as to encourage MFBs to grant more loans to the poor.

This was shared by Mr. Emeka Anakwe, the Managing Director of Maxitrust MFB, who said that micro-finance banks are only accessing fund from the shareholders’ funds.

“We need assistance from government because, right now, we are only accessing the shareholders’ fund. I don’t know what yardsticks they have used in selecting the MFBs that would access the fund, but I believe the fund should be for every micro-finance bank so that we can serve the poor better.”

Mr. Awa of Good Neighbours MFB requested that access to the Fund be transparent with equal opportunities to all MFBs.

“I don’t know the criteria they use in selecting the MFBs that would access the fund, but it should go round because, if the Central Bank of Nigeria (CBN)  has given us licenses to operate, we should be given equal opportunities to access the fund.”

It should be noted that the guidelines setting up MFBs by the Central Bank of Nigeria stipulated that funding for the banks activities is to come from the following sources; shareholders’ fund, made up of share capital and reserve; deposit/savings of customers; debenture/qualifying medium to long term loans; grants/donations from individual, organizational, national government and national sources; fees and commissions; and interest income.


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Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.