MFBs Identified As Agents Of Rural Transformation

Dr  Olusegun Ogidan, a micro finance specialist, has called on the Federal Government to consider using Micro Finance Banks (MFBs) as the mechanism to transform rural communities under its poverty alleviation programme.

Ogidan made the call in a presentation at the ongoing 2011 Financial Linkage Forum in Abuja, organised by the Rural Finance Institution Building Programme (RUFIN), an IFAD-assisted programme.

He said that the success recorded with Micro Finance Banks on fund disbursement to rural farmers in the 12 RUFIN states, showed that MFBs were the most credible channels for the rural poor to access funds.

He said that the seven-year programme is being implemented in 36 local government areas across 12 States of Oyo, Lagos, Anambra, Imo, Nassarawa, Benue, Zamfara, Katsina, Adamawa, Bauchi, Akwa Ibom and Edo.

RUFIN is being implemented with a 27.2-million-dollar secured by the Federal Government from the International Fund for Agricultural Development (IFAD) and was designed as a poverty alleviation programme with focus mainly on women, youths and physically challenged people. Later in an interview, Ogidan said that RUFIN had proved that it was possible to establish micro finance linkage between the rural micro finance institutions, micro finance banks and deposit money banks. According to him, the linkage has created a platform for the banks to mobilise enough funds to lend to the rural people and make life more meaningful to them. Ogidan also noted that the lack of access to finance had been a major challenge against the development of rural enterprises in Nigeria.

He suggested that the three tiers of government should consider channelling agricultural and other funds on poverty alleviation through MFBs.

He said the MFBs already had a model which included a transparent monitoring instrument and liaison with cooperative societies that could be adapted to further negotiations on channelling of funds. The choice of MFBs had become imperative because they were designed mainly to serve the purpose of the rural populace and in the process, had direct dealings with the rural populace, Ogidan said.