BY AMAKA ABAYOMI

Managing Director/Chief Executive, Accion Microfinance Bank, Mrs. Bunmi Lawson, in this interview talks on Accion International’s 50th anniversary celebrations which would take place in Nigeria, and how microfinance banks (MfBs) can facilitate a cashless economy

ACCION MfB openning its 12th branch despite the storm in the sector?

Our success and opening of the 12th branch is a result of our strong commitment to microfinance for us to be the market leader and economically empower people, we have to shine the light for others to follow. Findings from a survey conducted are that people open accounts in banks closest to them and we intend to saturate Lagos State by bringing our services right to their doorsteps, which is the key thing in micro-finance.

We are not yet where we want to be because there are 20 LGAs and 32 LCDAs in Lagos State and our vision is to open a branch in each LGA/LCDA, so we have 42 slots to fill. So far, Accion MfB has disbursed over N9 billion in loans to over 20,000 customers.

Operation of 18 branches

We presently have 12,000 borrowers and 60,000 savers, our total asset is N2.2bn, and our shareholders’ fund increased to N1.2bn due to the profit we recorded for 2011. Our 2012 projection is to touch most of the areas we have not touched by operating 18 branches and our loan disbursement will be an active portfolio of over N2bn.

Accion International is 50 years. Why Nigeria as the point of celebration?

Our technical partner and one of our share-holders, Accion Interna-tional, is 50 years this year. It has established 62 microfinance institutions in 31 countries of the world. Currently, the loan portfolio of the institutions in the network is over $5bn with 5 million clients. So these achievements are worth celebrating, though there is still so much to be done as an estimated 30 per cent of the 7 billion people of the world live in poverty.

The choice of Nigeria as the venue for the celebration just shows the success we have recorded over the years. They want to use us as an example of what they want going forward, especially as at the time Accion came to Nigeria, other foreign organisations were still hesitant to come. But we have been able to show that, if properly managed, Nigeria is a place where businesses can succeed.

ACCION MD, Lawson

Nigeria is highlighted as the number one country to invest in, in terms of the market potentials. A lot of investors looking for MfBs to invest in as part owners have approached Accion MfB and even the association. Our chief concern for next year, if the political environment is stable, is to position the sector in such a way that it would attract foreign investors.

What is the role of microfinance in a cashless economy and how achievable is it, considering the level of clients MfBs deal with?

MfBs would be the end mile to the users with a lot of us becoming agents to provide the needed services to our customers and ensure that they can link the e-wallet to their bank accounts. One of the key things people who are financially excluded want is convenience because they are busy with their businesses and may not have the time to waste at the banks. This makes putting banking in their hands key and any serious MfB should know that it has to provide that service.

Our survey has shown that 97per cent of MfBs’ customers have mobile phones while the number of those that are financially excluded are much more.

This means that those that don’t have bank accounts have phones and the advent of mobile money would enable us reach the financially excluded.

I urge MfBs to embrace it to provide services that are relevant to our clients. It is achievable because the people we deal with know numbers, so they can enter the PIN and codes they need to access their money. It is designed to enable the unschooled operate it.

I believe its success would depend on the level of awareness created. Officials of the Central Bank of Nigeria, CBN, have been going round the major markets and talking to their leaders, and a lot of MfBs and commercial banks have joined in the awareness campaign. On the national associa-tion level, we want to ensure that the associa-tion becomes a mobile money agent and we will ensure that we educate our members and customers on the service.

Nigeria tops Africa’s unbanked with over 80 million people. What can MfBs do to reduce this number?

Nigerian MfBs are doing a lot to reduce the number of those that are financially excluded because if you compare the last 2 reports of Efina survey, there is a significant increase in the number of people that have access to finance. We need to continue to provide the relevant products and services (savings and loans) which are in high demand to those that we serve.

MfBs in urban areas should resist the temptation of serving those not in our target group and focus on those that really need our services. I believe that with the next survey, there would be tremendous increase in the number of those financially included.

On a scale of 1-10, how would you rate the sector for the 2011 business year?

On the average, I would rate the sector 5.5 per cent, but I’ll rate Accion 7 per cent because some of us have done well, though a few are still pulling the sector down, but it had been better good than bad.

Largely, what led to the failure of the affected MfBs was undercapitalisation and structural defects, not intent of fraud. With the N20m capital requirement, you’ll spend close to N10m on rent in Lagos, while the remaining would take care of staff salaries and cost of running the business office. So at the end, the N20m is gone, making it difficult for them to lend money to customers.

How are MfBs coping in terms of funding, especially as the commercial banks are not lending due to the increase in MPR?

I would not say the banks are not lending as the last CBN report showed an increase in lending to the private sector. But we also have been witnessing higher demand of businesses who want bigger sized loans and this would put some MfBs under undue pressure to lend to bigger clients than their target market because the banks are not lending as much as they would want.

The big question is how MfBs get money as we were not getting money from banks even when they were lending. Our focus is more on international organisations who are used to funding the microfinance sector. We have organisations like Blue Orchid, Alitheia Capital and the likes who fund us.

The other area is the CBN’s Microfinance Development Fund and if they can put this fund in place, it would increase access for MfBs to capital for on-lending. We are mounting pressure on the CBN to set up this fund and they hinted that the association would soon be called for a meeting to discuss modalities for the fund. Hopefully, we should be able to access the fund by next year, just that I don’t think it would be as accessible as we all think because there would be some strict criteria.

What programmes does the national association have to aid members’ growth?

The major programme is capacity building and the Lagos State Island chapter is hosting a conference on November 24th for all MfBs in the state which would have resource persons that would talk on the key challenges facing the sector