December 19, 2011

Microfinance banks to construct 500 houses

Microfinance Banks in Lagos, under the auspices of the National Association of Microfinance Banks, Lagos State Chapter, NAMBLAG, have pledged to undertake a micro-housing project that will see them catering for the housing needs of a vast majority of the low income earners in the society.

Chairman of the Association, Mr. Olufemi Babajide, in his address to members in the report for the 2010 financial year, said the association plans to build 500 houses for the active poor with flexible and affordable repayment plan.

He disclosed that NAMBLAG has opened discussions with a financier that is willing to support the Micro Housing project.

Babajide said the project has been structured to ensure that the cost of constructing the houses will be affording and at little cost to beneficiaries.

According to him, beneficiaries of the housing project will be expected to make a monthly repayment of not more than N12,500 over a period of 20 years.

Speaking further, he lamented the dearth of funding support for microfinance banks in Lagos State, saying that the funds provided by the promoters and shareholders of Microfinance Banks are not adequate for the banks to increase their reach out to all the active poor that they intend providing banking services to.

“We, therefore, as a matter of urgency need funding from the Central Bank of Nigeria’s Microfinance Development Fund, Lagos State Government’s funds, local and international funds providers.

“More importantly, funds meant for poverty alleviation in any form by any tier of government or agency of government should be disbursed through microfinance banks.

“This will ensure effective channeling, monitoring and repayment. This approach will ensure the sustainability and continuity of such a programme.

He, however, said NAMBLAG has in place a Trust Fund that provides support funds to microfinance banks, adding that it provides short term liquidity to microfinance banks whenever the need arises.

“In the medium term, it provides finance and refinancing facilities to our members. The fund is managed by the trio of trust fund manager, trust fund custodian and executive committee of the fund. The fund will be contributory by members. Donors & Development Finance Institutions, DFIs will be approached to contribute into the fund,” he added.