Business
Save Micro Finance Banks, MD Tells CBN
Managing Director, Afribank Micro-finance Bank, Mr. Kashim Olanrewaju has adviced the Central Bank of Nigeria (CBN), to embark on sensitisation campaign to enlighten Nigerians on the need to save in microfinance institutions in the country.
Thus, according to him, would not only increase the impact of MFBs but would increase the confidence level in the microfinance market.
Olanrewaju who spoke recently in Lagos stated that the confidence level in the microfinance market is too low, forcing some operators out of business. He stated that the regulator has a lot to do to restore public confidence in the MFBs.
He called for special attention to the microfinance institutions like what is being witness in commercial banks.
According to him, “recently, the CBN stated categorically that no banks would be allowed to fail, especially those that are declared not financially strong. So, with that confidence, people feel safe to put their money in commercial banks. Something like this should also be replicated in the microfinance market”.
Though, he said the modality can only be determined by the apex bank, CBN should allow the public to know that their funds are safe.
While speaking from experience, he stated that immediately after the pronouncement of the CBN governor on the fate of the five banks whose managing directors were sacked, customers besieged most micro-finance banks to claim their deposits, which actually affected negatively, the operation of the affected banks.
He advised microfinance institutions to operate sound internal control system and good credit administration. Though microfinance banking is a new concept in Nigeria, he noted that the number of the liquidated MFBs as at now is still low.
He said the fact that 20 MFBs of the over 900 MFBs collapsed does not mean that the industry is distress. He called on the CBN to give people the right information on microfinance so as to boost the confidence level among Nigerians.
He noted that what MFBs are having now is image problem, adding that, it will be a different story in time to come.
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