The National Association of Microfinance Banks (NAMB) has kicked against the Central Bank of Nigeria (CBN) and the Bankers Committee’s plan to make available funds to NIRSAL Microfinance banks at five per cent intense rate.
National Association of Microfinance Banks NAMB
The NMFB is a brainchild of the Bankers’ Committee, the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) and the Nigerian Postal Service (NPS) with support from the CBN. It has a capital base of N5bn.
NAMB also kicked against the new minimum paid-up capital requirement by the CBN for microfinance banks, saying it could kill the industry and Micro, Small and Medium Enterprises (MSMEs).
The National President of NAMB, Mr. Rogers Augustine I. Nwoke, and other speakers at the 2019 Annual Microfinance Banking Conference on Friday were united against the policies which they described as not good enough for MFBs.
At the conference with the theme: “Sustainable and Innovative Digital Finance in MSMEs Development in Nigeria: The Microfinance Bank Option”, the NAMB president called on the CBN to extend same privileges it according NMFB to other MFBs as anything short of that would be discriminatory.
On the new capital base policy, he said, “Let us have a gradual growth in capital. You don’t move from N20m to N200m. The fact that commercial banks did 1,000 per cent increase doesn’t mean you should do the same for microfinance banks. So our discomfort is from the quantum leap. We should move gradually on a sustainable basis.”
It was revealed at the conference that a wholesale investment company for the MFBs, called Microfinance Development Company (MDC) had been launched, with a capital base of N500m. NAMB also launched a directory for all MFBS and a code of conducts and ethics.
Mr. Nwoke said in the first year of the MDC, it would float the microcredit bond as no one had floated that because of confidence issues, and that the MDC would develop risk assessment criteria for all MFBs and use them to lend to them.