Mr. Sunny Akhamiokhor is the Managing Director/CEO of Support Microfinance Bank Limited. He holds a Bachelor Degree in Banking and Finance from Ogun State University .
He is a Chartered Accountant,Â Associate Chartered Institute of Bankers (ACIB), Fellow Chartered Management Accountant, (FCMA), Master in Business Management (MBA) and MSC.Â In this interview with Vanguard, he x-rays the challenges facing microfinance banks, suggests way forward for the industry and outlines the unique services provided by Support Microfinance banks, among other issues.
When and how did Support Microfinance Bank Limited start its operation?
Support Microfinance Bank Limited was approved by the Central Bank of Nigeria (CBN) on 28TH November, 2008 to do the business of microfinance bank with the issuance of approval in principle. Our final license was issued on the 28th July, 2009. We have been in business since then till now.
We have been getting patronage from our customers since we opened for business and that is why we have continued to be in business despite the challenges facing the industry.
What are the challenges and how has the bank coped?
We have had a lot of challenges, especially the economic recession in the country. The saving ability of the average man has been reduced. There are a lot of financial issues in Nigeria today that at the end of the day has scaled down commercial banks activities and invariably affected the microfinance banks.
The microfinance banks no longer have the window in sourcing funds as long as their risk assets position is limited to what they can mobilize. To that extent, there is a challenge, you cannot meet up the kind of transactions you would want to do. You cannot borrow and if you cannot borrow you will be limited to what you have at your disposal.
Another major challenge we have in the industry is that a lot of people thought that borrowing from microfinance bank is cheaper that commercial bank. Unfortunately, it is impossible because microfinance banks mobilize money from the same market where the commercial banks get their own money.
So our prayer is that government should begin to play their own part as provided for in the microfinance policy and regulatory framework of the CBN. In fact, government should begin to play their own role by making available at least one per cent of the annual budget of the State Governments for on- lending activities of microfinance banks in favour of their residents. It is only when this is done that lending by microfinance banks would be effective.
What other role should government play that would make your service effective?
Government should be responsible for ensuring a stable macro_economic environment, providing basic infrastructures (electricity), water, roads, telecommunications, etc), political and social stability.
They should be responsible for fostering adequate land titling and other property rights sufficient to serve the collateral needs of borrowers and financial institutions. Government should institute and enforce donor and foreign aid guidelines on microfinance to streamline their activities in line with the policy guiding them.
Do you have any manpower problem in the industry?
Not at all, there are many qualified people out there ready to work. If you look at the economy, this is the period where business will strive better. While it is disadvantageous to a nation during recession, you find out that a lot of organizations retrenched people during that period, hence the best of manpower becomes available in the market. Manpower is not a problem for the industry at the moment because there are a lot of people looking for a place to work.
Is Support Microfinance Bank Information Technology (IT) compliant?
Yes of course. I will say today that Support Microfinance Bank has the best IT system in Nigeria amongst microfinance banks. We operate on the orbit software.
Because of our compatibility with financle we have an arrangement with Fidelity Bank that has made it possible for all our customers to work into any branch of Fidelity Bank in Lagos State to operate their account with us without necessarily coming to us. This is the first of its kind in the country. We have become the front runner in that project. We are the only microfinance bank in the country that is running branches without having to set up the branches with our money.
Do you have any relationship with the Lagos State Government?
For now, we donâ€™t have any relationship with the Lagos State Government but in the future we intend to have relationship that would impact on the people of the State. However, we operate in Ogun State . We serve both the people of Ogun and Lagos State . The Ogun State Government recognizes our contribution. A month ago, Ogun State Government in conjunction with CIFAÂ nominated Support Microfinance Bank for the fastest growing microfinance bank awardÂ in the State. The award which was slated to take place on the 4th of December 2009 has been postponed for logistic reason. So Government recognizes our contribution to the growth of the State. When the budget issue is resolved and finally approved we would approach the government to see how we can serve them through a channel for the dissemination of resources to the masses in the State.
What advice do you have for your customers and the public generally concerning your service?
For the sake of uncertainty in the industry, it is not my prayer that any microfinance bank should fold. This is because when that happens it affect the confidence people already have in the industry. In fact, such a situation send wrong signal to the people who patronize microfinance institutions.
So we always advise people to take time to study the kind of microfinance bank they patronize because there are quacks in the industry. Customers are advised to find out the operating license of such organization and whether they are registered with Corporate Affairs Commission (CAC). The CAC cannot register any microfinance bank that do not have license from the CBN. Furthermore, the people should look at the facilities put in place. There are some quacks that operate in one shop collecting money from people and duping them.
If they say they are operating as cash centre, people should find out from the head office of such microfinance bank if they are truly cash centre. On the business angle, as a customer the best way to asses you and your credibility is by the way you manage your own account.
Again, do not borrow money from the bank to mange the business you are not directly involved. If you borrow money and put in a business in which you are not directly involved in running it, then you will have problem because the people you keep to manage it may not give you the kind of returns expected from the business. At the end of the day you may not have the capability to repay the money borrowed, hence boo rowing another one becomes a problem.Â Conversely, as a customer you donâ€™t have to under borrow too, because if you do you may not have the kind of money that will complete your project, hence the project becomes abandoned. Some people borrow money because it is available