Lagos NAMB moves to group microfinance banks

By Amaka Agwuegbo
The Lagos State chapter of the National Association of Microfinance Banks (NAMB) has said plans are on to group the state chapter by local governments so as to facilitate better communication and governing.

Explaining the rationale for the grouping, Chairman of the state chapter, Chief Olutayo Adenekan, said the decision was taken to ensure that all members are carried along in the scheme of things.

“We want to all members to be involved in the activities of the association because we found out that some don’t attend meetings because of the distance or were not informed. Some don’t even know what is going on and when important decisions are taken, they say they were not consulted.

“Lagos State alone has more than 250 microfinance banks (MFBs) with some local government areas having more MFBs than some states. In our bid to carry everyone along, we came to a conclusion that it would be much easier to lead and get them involved if they are divided into groups, and we are using each local government as a group. Each local government will have a chairman, secretary and treasurer who will report to the state executives.”

Adenekan pointed out that steps are being taken to organize elections for the various local governments whom will have their respective funds and budgets and have the authority to take decisions on matters that affect them.

“The various chairmen will relay whatever information or decision taken by the state executives to their members and vice-versa. This will enable us have more reach and all have the opportunity to participate in the association.”

Speaking on the Intervention Fund, which is being set up to cater to the short term liquidity needs of member banks, the chairman said plans are still in progress and it is hoped that the Fund will take off before the end of August.

“The Fund would have taken off by now, but was delayed by the merger and election of new executives because there was no authority for the former executives to give the mandate for the Fund. The CBN is in the know about the Fund and have assured us of participating if we can have a good management system for it.

It would be recalled that the Lagos State Chapter of NAMB set up the Fund to address short term liquidity issues that is becoming a common feature in the microfinance sector.

According to Adenekan, the Intervention Fund, which would act as a form of bailout, is contributory and would be used in assisting members in need.

“Members would have access to the Fund at the shortest notice and we are building it into collateral in the sense that each bank would register collateral with us so that when they need cash, we don’t need to start vetting their banks.

“This implies that if the collateral is worth N4 million, it means that at short notice, that bank can take a loan of N4 million.”