By Providence Emmanuel

The Managing Director, Supreme Microfinance Bank, Mr. Jide Aremo, in this interview, shares his concern about the state of the subsector and the quest to achieve 80 percent financial inclusion by 2020.
Excerpt:

WHAT are the trending issues in the sub sector?

The latest is that the authorities are telling us that they are going to reverse the policy, they want to change the capitalization but we don’t know when yet. People are not paying, it is difficult to lend and get your money back. 

Jide Aremo

What are the MfBs doing in line with CBN target to achieve 80% financial inclusion by 2020?   

It is a persuasion, those who are working with the federal government and the economy on financial inclusion did a survey sometime ago. It was the report of that survey that made the Central Bank of Nigeria, CBN, to issue that statement that the banks should work more.

Is this achievable?

I would say, let everybody try, but it wouldn’t be easy to achieve that kind of target. Because for those of us who are practicing, honestly, the feedback we are getting from the economy is not encouraging at all. Although we are still lending but so many MfBs are not lending again. The commercial banks have stopped lending a long time ago, it is only the MfBs that are lending and most of their money is getting trapped and there is no reflation in the economy even though election is coming, we don’t feel anything. 

But the federal government is doing their best for the economy?

I am not enthusiastic about what they are doing because at the end of the day, most of the money being shared through the various intervention funds would be lost. They are supposed to pass the money through the system or channel it through organization but the way they are doing things by giving people money to share and get it back at zero interest or what have you, I doubt if they would last. It is after one year, we would start seeing the effect of all these money they are giving. 

How then would the MSMEs subsector grow with all these problems?

Most of the people collecting this money and even the government that is sharing the money, it is not as if people don’t mean well. But when you collect the money and discover that there are vagaries in the industry and the money would be exhausted  without accomplishing much with it. Such things except if they are channeled through a formal system such as banks, there would be no continuity. Because the money they are giving them is small, when they are unable to repay the money, they can’t go back to collect another one.

Even the one they are channeling through us, most of the banks have finished paying to government through CBN or the Bank of Industry, BoI.

Well, may be after the next election when we would have had a stable government, even if it is the same government;  but they now know that they have to deliver and that there should be continuity in some of the things they have been trying, may be then, things can get better. The economy is not in good shape at all.

For our bank, we don’t even apply for the intervention funds because we are tired of chasing something and meeting disappointment or they ask you to pay a certain amount to get it and after paying, to get it, you have to pay another thing. Corruption is just everywhere and this puts me off.   

Is it CBN’s problem?

The problem is a national problem because I don’t know why the CBN and the BoI are not disbursing. Maybe they are under pressure from government especially state government. Most of the money they are using to do palliative relief, I think it is the same fund. May be they are using it to pay salary and when these people get it, it may not be used to pay salary, they will divert it to something else. There is no state government that is not indebted to the federal government, so when would they pay that kind money? Look at the case of power distribution companies, government has put in more than N800 billion, when are they going to pay?