The Lagos chapter of the National Association of Microfinance Banks says the 198 microfinance banks in the state are being owed N34.6 billion by customers. The chairman of the chapter, Olufemi Babajide, said in Lagos on Monday that ¦ 10 billion of the debts had gone bad.

Babajide said that there was the need for the Central Bank of Nigeria (CBN) to set up a company that would take over some of the debts. “We want the CBN to set up a company like AMCON that will finance our debts over a period of 10 years. “This will encourage microfinance banks’ commitment to rehabilitating the active poor and enhance economic activities in the country.

“There is the need for the CBN and the federal government to speed up all necessary funding windows for the sub-sector,” he said. Babajide said that the huge debt portfolio was responsible for general slow pace of activities in the sub-sector.

He also urged the stakeholders to generate ideas that could place operators in the sub-sector at par with microfinance banks in Bangladesh.

He said the association had also initiated advocacy on issues that would help the sub-sector to attain new heights.

“We will continue to discuss with the CBN and the federal government until our toxic assets are bought over like those of commercial banks. “We will also continue to advocate for the release of the ¦ 54 billion Microfinance Development Fund for the sub-sector. “We are pleading that the banks that are still operating should not be allowed to die under the weight of debt,” Babajide said.