By Amaka Agwuegbo
The National Executive Council (NEC) of the National Association of Microfinance Banks (NAMB) has set in motion plans to revamp the microfinance sector.
Speaking at its Strategic Planning Meeting of the NEC, NAMBâ€™s president, Chief Mathias Omeh said the aim of the meeting is to look at ways of refocusing and redeeming the image of the MFB sector by partnering with the Central Bank of Nigeria (CBN), Nigeria Deposit Insurance Corporation (NDIC) and the Economic and Financial Crimes Commission (EFCC) on the possibilities of fishing out and prosecuting fraudulent MFB operators.
Omeh also said the association would look at its challenges and a strategic committee would be commissioned to look at the best way of solving the challenges facing the sector.
â€œSince our aim is to ensure that stronger and more vibrant microfinance banks (MFBs) emerge through the sanitization of the sector, we looked at our internal problems and the most important is to fashion out ways of sanitizing the sector. This we hope to achieve by strategically partnering with the CBN, NDIC and EFCC on the possibilities of flushing out illegal and fraudulent operators from the system.
â€œWe need to build capacity in the sector and we have resolved to set up committees to look at our training needs and come up with recommendations on the best way to handle it. This will enable us know those challenges that we can resolve on our own and those that would require the assistance of the CBN and other agencies that would help build capacity in the sector.
â€œWe are in a hurry to enthrone best practices in the sector so as to gain high visibility on the global network of MFB associations and stakeholders. Since one of our biggest challenge is living up to the expectation of our customers, NAMB is going to work with the regulatory bodies and EFCC to sanitise microfinance banking practice in Nigeria. Top on our blueprint under the strategic partnership with the CBN, NDIC and EFCC is to fish out and report illegal operators of microfinance banks and members of NAMB who engage in fraudulent, unethical and below-the-counter practices that are not approved by the regulatory bodies.
â€œNAMB would also institute frameworks for self-regulation by creating and enforcing a code of ethics for MFBs to eliminate charlatans, promote global best practices by members and protect unsuspecting customers from exploitation and fraud.â€ Stressing on the importance of self-regulation, NAMBâ€™s president, Omeh, said since all licenced MFBs must be members of the association, it rests on the leadership of the association to put in place measures and sanctions to stave off undisciplined banks who have portrayed the sector in bad light.
â€œSince there could be internal abuse which may have led to the failure of some MFBs, we will liaise with the CBN because since MFBs render monthly returns to the CBN, we will request it to give us a list of banks that are not making their returns so that we can send people over to the banks to know if they actually exist.
â€œAlso, since there are similar organisations in nearby African countries, especially with the association of microfinance banks of Ghana doing so well in self-regulation, we intend to contact them on the possibilities of adopting some of what they are doing there. This will enable us to firmly hold our members and ensure that the right things are done and this will be the loudest campaign.â€
Pointing out that it is the duty of the association to protect depositorsâ€™ funds, Omeh urged the CBN to publish the list of troubled MFBs so as to warn customers against them since the association canâ€™t compel customers not to patronize the banks of their choices.
Also lending his support, the 2nd Vice-President, NAMB, Barr. Jude Nosagie, said the NEC aims to achieve sanitising the sector by working together with the regulators and law enforcement agents to fish out corrupt and fake MFB operators since there will be no hiding place for them.
â€œSince we have resolved to do everything positively possible to right the bad image the sector has earned, we have put in place appropriate committees that would monitor the activities of operators, thereby, making it impossible for them to continue their fraudulent practices.
Since MFBs are development banks because depositors have invested their funds in them, the CBN and NDIC should see us as partners in progress.â€ For Alhaji Ahmed Biya, the agenda is laudable since the association has a responsibility to the regulators, operators, customers and the nation.
â€œIt is our responsibility to protect our customersâ€™ deposits by punishing erring operators. Due to the fragile nature of the market because of the money involved, not punishing erring members would rub off on those banks that are doing well, and that is not healthy for the sector.â€
The National Executive Council of NAMB, which was joined by key stakeholders in the MFB sector initiated a 10 point agenda that would lead to the development of the sector. It includes, to scout for, attract and promote support to MFBs from government, development institutions and donor agencies; seek and undertake bilateral visit, meetings, conferences, linkage and exchange programmes with foreign MBF associations, donor agencies and relevant UN and World Bank financial and economic development institutes.
Others are to arrange capacity building trainings for members in collaboration with relevant bodies and interested organisations; ensure that the agreed succession plan and adequate geographical representations are entrenched in NAMBâ€™s succession system; ensure that the Executive Council of NAMB at zonal and state levels are made up of chairmen and managing director; organise induction courses for management and staff of newly established MFBs.
Yet, others are to organise national and zonal workshop for members on annual federal budgets, public policies, legislations, regulatory and strategic issues that affect MFB operations; publish and circulate a quarterly press release on the activities of NAMB, which would eventually transformed into a quarterly NAMB newsletter or bulletin; and finally create a website and web cast the associationâ€™s activities and programmes.