October 13, 2014

LAPO increases access to finance with AfDB’s $12m credit

LAPO increases access to finance with AfDB’s $12m credit

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LAPO Microfinance Bank (MfB) has said that the reason behind the $12 million (N1, 980,000,000) African Development Bank’s (AfDB) Line of Credit (LoC) granted it is to increase access to finance for small business owners especially women.

Also, the bank said that the LoC will support its proposed expansion project to achieve a goal to serve five million clients by 2017 in the country with a focus on low-income individuals, predominantly women and micro/small enterprises by providing affordable access to finance, saving, credit and insurance in urban and rural areas as well as by expanding its geographic coverage and number of branches.

In a statement made available to Financial Vanguard, the bank said that the other rationales behind the fund include: to increase the proportion of poor households and small businesses with access to financial services in Nigeria; deepen its financial sector infrastructure, as it plans to expand their branch network across the country; promote an inclusive microfinance model that works for the poor; stimulate product development aimed at meeting diverse needs of low-income households and local enterprises; enhance financial inclusion of women and female entrepreneurs and support increased revenue of poor households involved in profitable micro enterprises and also generate more jobs across states in Nigeria.

According to the bank, “The Board of Governors of the AfDB through its private sector window approved a $12 million LoC equivalent in Nigerian Naira (NGN) to LAPO Microfinance Bank (MfB) in Nigeria

Given its history of a group-lending model based on a community-based approach, the bank focuses on low-income households and women (with females comprising over 90 percent of its total client base) by providing an average loan size of $190.

In spite of its lower-income client base, its total loan portfolio exceeded $144 million in December 2013. With 1.1 million clients and 327 branches currently operating in 26 out of 36 states, about 3,184 staffs (1,311 men and 1,873 women staff) is under its employment list