By Ebele Orakpo

WHen Professor Mohammad Yunus founded the first microfinance bank (MFB) called Grameen Bank in Bangladesh, his aim was to eradicate poverty by empowering the rural poor through loans. The first principle of microfinance banking is that the bank should go to the people.

At the last Impact Conference series organised by the First Bank of Nigeria where Professor Yunus delivered a keynote address, he noted that what we have in Nigeria is not microfinance banking but micro commercial banking.

This deviation from the original principle was probably what caused the near total collapse of microfinance banking in Nigeria. Micro-finance banking was introduced to provide a platform for the under-banked segment of the economy that may not be able to meet the stringent requirements of the conventional banks. It was incorporated into the Nigerian financial system as a way of alleviating poverty. It was to promote entrepreneurship through micro lending especially to the poor and economically disenfranchised.

In a bid to stem the tide and also debunk recent assertions that Micro-finance banking has failed in Nigeria, the Association of Micro-Finance Banks, Lagos Island Chapter is embarking on a campaign to showcase their achievements. The first in the series of events is slated for November 24 at the Southern Sun Hotel, Ikoyi, Lagos at 8am.

The campaign, according to a Press release by the organisers, has as theme: Micro-finance is Working and incorporates a series of strategic events that will showcase the contributions of MFBs on Lagos Island to the socio-economic development of the country.

The organisers noted that “Micro-finance banks encounter an overwhelming array of regulatory constraints which the CBN can address in their policy reform work. MFBs as presently constituted, are less inclined to engage in policy advocacy work because they lack resources, experience and cohesion.

“The association has, in spite of numerous challenges, recorded considerable success even as they struggle to grow in an uneven playing field and increasingly stifling environment. However, there are challenges that increasingly threaten to erode these successes and inhibit future growth.”

According to the release, the event will feature interactive sessions combining presentations, field reports, future plans, as well as real life cases from experts and practitioners.

“The events which will seek to highlight the importance and role of MFBs in a cashless economy, will also strive to convince industry regulators, stakeholders and other participants of the strategic and indispensable importance of MFBs in the quest for poverty eradication.