By Amaka Abayomi
The Lagos State Chapter of the National Association of Microfinance (NAMB) has praised the federal government for its promise to set up the Microfinance Development Fund, saying it would crash the high interest rates in the microfinance sector.

Speaking to journalists after its first expanded Exco meeting, the Acting Chairman, Mr. Olufemi Babajide, who assumed office after the resignation of Chief Olutayo Adenekan, said the establishment of the Fund would boost their operations and crash the high interest rates obtainable in the sector.

“The federal, states and local governments are supposed to set aside one per cent of their budgets for onlending as enshrined in the microfinance policy. But it is sad that as we speak, that is yet to happen.

“But with the federal government’s promise of establishing the Microfinance Development Fund, we are optimistic that the high interest rates that resulted from scarcity of funds would crash thus, boosting our operations.”

Babajide noted that to make 2011 turbulent free for MFB operators, the association has concluded plans to partner with OIKO Credit, one of the world’s largest private financiers of the microfinance sector that offers loans or investment capital for microfinance institutions, cooperatives and SMEs in developing countries, to support the activities of the sector.

He listed part of the criteria for accessing the OIKO Credit Fund to include that the MFBs must have a CBN license to operate and must have a minimum of 3 years audited account.

Others are that the MFB must be making profit; have strong management team; meet the recommended liquidity ratio; have a minimum of 500 loan customers and 1,000 savings customers; must be a financial member of NAMB; operate an account with a Deposit Money Bank acceptable to OIKO Credit; and must ensure that the fund will be for identifiable or refinancing of projects.

According to Babajide, the 10-point agenda of the Lagos NABM include the identification of member institution, protection of members, better visibility, self regulation, and business support fund.

Others are accountability and financial responsibility, setting up a state secretariat, committees, capacity building and policy formation.