CBN Tasked on Microfinance Growth

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Feb 2007
Lagos, Nigeria, February, 11 2007 - Managing Director of Susu Microfinance Bank, Mrs. Toyin Adeniji, has called on the Central Bank of Nigeria (CBN) to create an enabling environment, which when entrenched into the banking sector, would help foster the growth of microfinance organisations in the country.

Adeniji, who spoke in Lagos, during the signing of a $2.4million Access to Finance performance grant agreement by the Federal Government and the World Bank for her company (Susu) and MIC Microfinance Bank, stated that the apex bank's role could still be appreciated the more, if its regulatory policies are fashioned out in a way to encourage the growth of microfinance across the country.

According to her, "CBN is trying as a stakeholder but it needs to create an enabling environment for the growth of microfinance operators to thrive. Regulations are welcomed but we ask that 'over-regulations' should be avoided".

Speaking further, she hinted that such regulatory framework  would usher in the emergence of "umbrella associations, advocacy, remittance policy structure" for microfinance banks to do better in the now capitalised financial sector.

On the $1.2 million grant, Adeniji pointed out that the bank has as its target market "microentrepreneurs, small businesses, groups, associations...unbanked...", thus confirming its vision as a "leading provider of microfinance services across Africa and the Middle East".

Said she: "We have resolved to ensure that the access to finance component achieves its target objective by broadening the financial services available to Micro, Small and Medium Enterprises (MSMEs). This we have done through the 255 loans disbursed; 232 active loans, N9, 063,836 outstanding loans , and with a portfolio at risk of 30 days  for 8%". The signing of the $2.4 million Access to Finance performance grant agreement by the Federal Government and the World Bank is said to be the pilot programme designed to accelerate private sector growth in Africa by leveraging on World Bank Instruments, especially those of International Finance Corporations (IFC) and International Development Addociation (IDA).

According to Engr. Mustafa Bello, the executive secretary, Nigerian Investment Promotion Council (NIPC), "a total of $4.2 million access to finance fuind has been committed out of the $8.0 million that was disbursed".

"These grants will be used to finance technical and capacity-building assistance to the providers. The allocation and disbursement of the grants are governed by confirmity to eligibility criteria and performance targets, as set out in the performance agreements to be signed between financial intermediaries and the FGN through government executing agent, NIPC", he added.



Source : This day website
 

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