By AMAKA ABAYOMI

Microfinance banks in Lagos State lost over N2.4 billion due to the 6 days strike action over the remoal of fuel subsidy.

Disclosing this to Vanguard, the Chairman, National Association of Microfinance Banks, Lagos State Chapter (NAMBLAG), Mr. Olufemi Babajide, said MfBs in the state also lost N362 million interest on loans as their customers could not trade during the 6 days the strike lasted.

“The 6 days nationwide strike affected MfBs in Lagos adversely as we lost over N2.4bn in expected inflow for the duration of the strike and another N362m interest on loans that accrued for the duration of the strike.”

Commenting on the effects of the increase in pump price on the microfinance sector and its customers, the chairman said the most notable and immediate effect is the increase in the cost of doing business.

“The overhead of MfB operators increased as there will be the need for us to increase salaries and transport allowances, there will be an increase in the funds budgeted for fuelling the generators, and we have to write off the interests charged our customers for the duration of the strike.

“But I think there would be more opportunities that will be created for our customers who are at the lowest end of the market with the deregulation of the downstream sector as there would be more petroleum by-products for them to trade in to increase their earnings.”

NAMBLAG has taken steps to ensure that 2012 operating year is more fruitful as it is pursuing more business support funds to enable it cater to over 9 million unbanked and under-banked in Lagos State have commenced.

To facilitate access to more funds, Babajide stated earlier that the association has entered into an agreement with the Lagos State Microfinance Institution (LASMI) to support MfBs in the state with funds in phases so as to enable us expand our scope.

According to Babajide, “Our major target for 2012 is to grow our loan portfolio to N100bn to enable us increase our loan customers from 1.2 million to about 4.2 million people.

“NAMBLAG is equally undertaking a micro-housing project that will cater for the housing needs of a vast majority of the low income earners in the society. We are working out modalities with an interested financier that would see us construct 500 units of houses.

“In our bid to ensure continuous upgrading of our manpower, NAMBLAG would continue to partner with stronger financial institution like ICAN, CIBN, etc, in 2012 for capacity building that would move the sector forward.”