By Amaka Agwuegbo
The Managing Director of Havilah Microfinance Bank, Mr. Rufus Oloye, has said the credit products of microfinance banks (MFBs) can make meaningful impact on the economy if Nigerians can become good borrowers.

Speaking to Vanguard, Oloye, said though most MFBs have sound credit products, but the bad borrowing habits of Nigerians, who are always perfecting their skills on not repaying loans, have made it almost impossible for the impact of these products to be felt.

“Most MFBs have sound credit products, but the major problem is that most Nigerians are bad borrowers because a good number of them hardly live up to expectation and this makes the impact of the sound credit products not to be felt.

“Also, due to our peculiar culture and society, some of them take the money and don’t use it for the purpose it was intended, no matter how good you perfect your bank’s monitoring techniques.

“The rate of default is still manageable, but there is the need for debt recovery. One thing is that loan default would always be on the increase as long as lending is on the increase. Loan seekers need proper monitoring and supervision, because if you don’t pursue them, they won’t bother to pay back.”

Commenting on the harsh operating environment that MFBs are made to operate in, Oloye pointed out that a number of factors are responsible for the crisis in the sector.

“The truth is that most people don’t know that managing an MFB is not too difficult, as long as the rules guiding the sector are followed.

“Manpower alone is not the issue, though it is important when we talk of training. But we need to realize that we work under a very hostile environment and the infrastructures are not easily available. The cost of running the industry is very high, especially for those in the urban areas.”

Oloye further said all MFBs should have equal access to funds from government and donor agencies so as to impact on a larger number of people.

“I am an advocate of government-private partnership because some MFBs get some money in forms of grants from state governments or foreign and local donors agencies. If these funds are allowed to go round all MFBs, it would impact more on the customers than when in possession of a few people. This is because those in possession of the funds always do better than others.”