Business
CBN Explains MSMEs Fund
The Central Bank of Nigeria (CBN) said last Saturday that the Micro, Small and Medium Enterprises Development fund was not meant to bail out distressed micro-finance banks.
Director, Other Financial Institutions Development (OFID) department of the CBN, Mr Olufemi Fabanwo, made the clarification at the 2nd Annual General Meeting (AGM) of the National Association of Micro Finance Banks (NAMB) in Abuja.
Fabanwo said the fund, which was initially established as Micro Finance Development Fund (MDF), was changed to MSMEs Development Fund.
“The MSMEs fund is not medicine for those who are weak, the MSME fund is going to be accessed by institutions that have shown proven record of performance; it is not for any micro finance bank.
“It is not a bailout fund. There is going to be a social window for capacity building in any area that will augur well for the development of the sub-sector.’’
The director said CBN was not satisfied with the level of returns rendition and the audited accounts of micro-finance banks.
He said that only about 70 per cent rendition had been recorded by the apex bank since the end of the last financial year.
Fabanwo, however, added that the MFBs had recorded greater stability after the September ‘sanitation’ carried out by the apex bank in which 244 licences of MFBs were revoked.
He stressed the need for micro-finance banks to update their subscriptions annually, warning that the apex bank would not hesitate to penalise defaulters.
The director said the AGM recorded 220 participants in 2011 compared to 400 this year.
He said there was need for improvement as the figure only represented a quarter of the expected 1,708 participants.
Fabanwo observed that the shortfall in attendance indicated that apathy to the activities of the association was still very apparent.
Commenting on the new development fund, the immediate past president of NAMB, Chief Matthias Omeh, said the announcement by CBN of the change in the name of MDF to MSME fund was new to him.
“I am just hearing about it for the first time from the Director of OFID, that they have changed the MDF to MSMEs,’’ he said, adding that although he had not seen the details, micro-finance banks still fall into the range of small and medium scale enterprises.
Reports say the highlight of the event was the election and swearing-in of new national officers.
The immediate past first National Vice President Mr Jethro Akun was sworn-in as president of the association.