By PROVIDENCE OBUH

Over 90 per cent of borrowers in the microfinance banking segment give fictitious address, said George Adetokunbo, Managing Director, Ipman Satellite Microfinance Bank Delivering a lecture on ‘fraud and forgeries in Microfinance Banks (MfBs), he said this is done in collaboration with insiders in the bank.

He spoke at a capacity building programme organized by National Association of Microfinance Banks (NAMB) South West Zone to enlighten its members on the incidence of fraud and forgeries.

Adetokunbo described fraud as a conscious and deliberate action by a person or group of persons with the intension of altering the truth or fact for selfish personal gain.

Adetokunbo pointed out that fraud in the sub-sector cuts across the entire spectrum.

He warned staff of MfBS to desist from accepting free meals from customers who borrow from their banks as this can serve as an excuse when they default in paying back loans granted to them.

“The rate at which MfBs are dying today is higher than the days of community banks because everybody is flooding the sector,” he said.

The capacity building training is one of the seven point agenda of Mr. Olufemi Babajide, Chairman NAMB South West Zone.

Commenting on the training, Babajide said “We want to use this capacity building programme to educate our people about the incidences of fraud and forgeries. We want to remind them that this sector is highly regulated and if you commit fraud, you cannot move to anywhere in this country because as employees we have captured all your data, your hometown, birth-date, among others, so you cannot really move to anywhere in the world.”

Meanwhile, the CBN received about 10,845 mails on financial crime, particularly the advance free fraud in 2011.

Senior Examiner, OFSID, CBN, Mr. David Adelana disclosed this, stating that the number of forgeries and fraud which increased in value in 2010, declined in 2011.

Adelana identified opportunity as the basis for fraud, advising management of banks to   limit circumstances that allow staff to carry cash without restrictions.

”Opportunity is created by weak internal control through the provision of fund by the internal auditor. Managing Directors’ should conduct proper checks by monitoring the activities of their employees

“You cannot change the motivation of a fraud perpetrator, but the only thing you can change is the opportunity, close every opportunity you fill can cause fraud, identify all the possible opportunities and beware of domineering staff,” he pointed out.

Microfinance Banks operating under the umbrella body of the National Association of Microfinance Banks (NAMB) South West Zone has embarked on training programmes to educate members on the dangers of indulging in fraudulent activities. The training identified as ‘capacity building programme’ to address the incidence of fraud among staff and operators of Microfinance Banks operating under the zone.