The Central Bank Of Nigeria(CBN) has complained about the low mobilization of deposits by the Microfinance banks in Nigeria.
This was stated on Thursday, April 25th, 2019 through the Director, Other Financial Institutions Supervision (OFIS) Department of CBN – Mrs. Agnes Martins – at the 27th edition of the ongoing seminar for financial journalists in Gombe State.
“Deposit mobilization by many of the Microfinance banks is not enough; if not, why do we have so much currency outside the banking system? By means of the statistics in the CBN, what we are seeing is that the currency outside the banks is still huge.”
She further stated that “cash should either be in bank vaults or in vaults of CBN and we know how much we have issued. So, when we minus the one in our vaults and we minus the one in the banks then where is the rest?”
Microfinance Banks to help bank the unbanked population.
Mrs. Martins emphasized on the importance of Microfinance banks in poverty alleviation in Nigeria, saying they would be key to economic growth. She further pointed out the need for them to enhance their reach and give out loans to MSMEs to develop their businesses and providing access to finance for the purpose of banking the unbanked population in the country.
She said: “According to a survey carried out by the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) and the Lagos Business School (LBS), there are 37 million MSMEs in Nigeria and only 1 million have access to loans. This is a sector with over 80% of the people working in Micro, Small, and Medium Enterprises (MSMEs) which contributes to over 80% of employment level and also 80% of GDP of Nigeria.”
Central Bank of Nigeria intervention framework for the MFBs.
Speaking on the central bank’s efforts to advance the sector, she said the Nigerian apex bank is working diligently and also planning to incentivise some operators in the sector so that banks that are doing well can grow and expand.
Meanwhile, the Central Bank of Nigeria has approved a special intervention framework for qualified microfinance banks and there is the hope that it will incentivise others to get their house in order, so they can also qualify to access these funds.
Microfinance Banks in Nigeria.
Microfinance banks in Nigeria offer a collection of financial services which include making loans, savings and insurance accessible to entrepreneurs who have no collateral and would not normally meet the requirements for a standard bank loan.