The Managing Director, Asha Microfinance Bank Limited, Mr. Aminul Haque Bhuiya, in this interview, gave the similarities between Nigeria and Bangladash microfinance banks, MfBs, operations, stressing that there are huge opportunities for operation in the country. Asha is one of the big MfB institutions in the world with headquarters in Bangladash.
By Providence Emmanuel
What are the similarities between microfinance banks in Nigeria and those of Bangladash?
Nigeria is a big country compared to Bangladash and there is a big opportunity to operate microfinance in Nigeria. Basically, microfinance is for empowering the active poor women, so that they can support their family.
Family heads or husbands have responsibilities to handle and to assist the family head, we decided to empower the women and give them small amount to do their business. Bangladash is a Muslim country, all women are not free to go to the market and they are not doing direct business.
After collecting loan from microfinance institution, they hand it over to their husbands. Ultimately, this money is going into a different business, it is not making additional profit.
But in Nigeria, the difference is, the women collect money and use it to invest in their business beside that of their family head or husband and they are making profit and supporting their husband. This is the main difference between the Bangladash and Nigeria microfinance bank operations.
What is the interest rate regime in your country?
Bangladash’s interest rate is lower than what is obtained in Nigeria. We collect 2.5 percent per month from our customers and beside this, we are not collecting anything more. This rate is for targeted client or customers who are not very rich. So we consider such customers in terms of how we can reduce the interest rate. It is a very important for our targeted clients.
Loan recovery is a major challenge in Nigeria, what is the situation in Bangladash?
For real microfinance institutions, loan recovery is not a difficult thing because we are in the same market. I would say that our recovery rate is 99.8 and default is 0.05. But if you consider it in the overall microfinance sector, it is very high because most MfBs are not investing loan on the active poor but the middle class people who are collecting N500,000 or N1million.
These people are not as responsible as our microfinance targeted customers who sell tomatoes and pepper on the roadside. These tomatoes sellers are more responsible in terms of returning back 100 percent of the loan acquired from microfinance banks. But if you go to the middle class, they are always trying to avoid paying back loan.
The main challenge with loan recovery in Nigeria is that, we are not actually practicing the real microfinance, if we do, 100 percent recovery would be ensured. We are a proof that microfinance is working, Asha and others, if you look at the sector’s overall recovery, it is very poor but per individual recovery, we are almost 100 percent.