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FG tasked on providing enabling environment for MFBs

By Amaka Agwuegbo
The Federal Govern- ment has been urged to provide an enabling environment to enable microfinance banks, MFBs, provide cheaper services to their customers.
Speaking at the  second Customers’ Forum, last week, the Managing Director, Accion Microfinance Bank, Mrs. Bunmi Lawson, said if the government can provide adequate infrastructure for MFBs to operate, the cost of doing business would be low, making it possible for them to provide cheaper services.
“Government can help MFBs by creating an enabling environment, especially in term of adequate infrastructure as this will make the cost of doing business lower. This will make our customers to benefit from higher income while the MFBs can operate at a cheaper rate by providing cheaper services.”

Explaining why past govern-ment initiatives at helping MFBs failed, Lawson said that government’s involvement by giving money spoils the market.

“When government becomes involved and gives MFBs money, it spoils market because most people think that the money is free while others will see it as part of the national cake, making them reluctant to repay loans taken from MFBs.

“That is why past govern-ment initiatives in those areas failed. What government needs to do is to make sure that the policy regulation, super-vision and enabling environment are created so that MFBs and SME banking will thrive.”

Speaking on why the essence of the Customers’ Forum, Lawson said the customers ought to be celebrated because we feel that we have achieved our vision of making the future bright through our customers.

“This is because we have specifically tailored our products to their requirements, which have made it easy for them to repay loans. Unlike other banks that you have to go through long application processes and huge collaterals, we have simplified ours by doing the work.

“We evaluate them to make sure that they can repay certain amounts of loans so as to make sure that they are not over-indebted. By so doing, this will enable them to use the loans to earn more income and still be able to repay such loans.”

She pointed out that the invited customers are among the best customers who are using Accion’s financial services to grow their businesses and are faithful in repaying the loans.

Commenting on the failure of some MFBs, Accion’s MD blamed the failure on liquidity issues as most commercial banks are no longer lending to other financial institutions.

“Most MFBs are having liquidity issues and, unfor-tunately, Nigerian commercial banks are not used to lending to other financial institutions because the way you will structure your loans and collateral requirements is different from when you are lending to a corporate business that is probably in manufacturing. So, because we don’t have access to liquidity, if depositors start withdrawing their savings, you can’t go and start collecting your loans, making liquidity the main issue most MFBs are facing.

Highpoints of the Forum was the awards given to some of the customers. Best overall customer and best repeat loan customer went to Miss Saidat Aduni. Best referral customer went to Mrs. Nnenna Elizabeth. Mr. Olu Isaac went home with the best non-defaulting customer while Mr. Dauda Marcus won the best savings customer.


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