The National Association of Microfinance Banks in Nigeria (NAMFBIN) has concluded plans to change its name to the National Association of Microfinance Banks (NAMBS).
The move would enable it to improve on grassroots empowerment for low income earners and help poor people in the country.
The President of NAMFBIN Olutayo Adenekan, told newsmen last week after the association’s monthly meeting in Lagos that with the new name, Microfinance Banks (MFBS) would be better positioned to gain more financial support from apex bank.
According to him, “arrangements had been completed for the establishment of a new umbrella body. Many MFBs refused to join NAMFBIN because they said that it was established by owners of the defunct community bank but with this, there would be improved integration of more MFBs in the association”.
He said that the CBN has decided to organise all the MFBs in the country under the NAMBs, to enable it harmonise their operations. Adding that, the new body would enable the CBN to further assist MFBs in various ways.
Adenekan further noted that the new association would eliminate disunity among MFBs operators and also enable the CBN assist MFBs with some intervention funds. He said that the capacity building programmes now being floated by the CBN will offer numerous advantages to the banks.
He disclosed that the major challenges in the sector for now are in staff recruitment but with the amalgamation, MFBs will be better able to set standards for staff recruitment.
Sanusi Lamido, CBN governor disclosed this recently at the International Monetary Fund (IMF) meeting in Istanbul, Turkey. He said that the CBN is considering outsourcing the supervision of MFBs in the country to a private firm in view of inadequate personnel.
According to him “the major challenges of the MFBs in Nigeria are that of administration but we are currently working out modalities to address the issue.”
In a similar development, Williams Ogunba, deputy director of financial Institutions Department (OFID) informed that CBN would no longer compromise improper and untimely rendition of statutory returns from MFBs to the apex bank.
According to him, “The manufacturing sector needs funding, it needs tariff regime that supports its course and above all, the sector needs power to enhance its productivity. The banks were supposed to have channeled funds towards the sector, but unfortunately, had diverted such money to the oil and gas industry and the capital market, which is currently witnessing serious downturn.”
He said that though there was need to create an enabling environment for the banks to operate, he stressed that the ongoing banking reforms would shore up the sector, adding that “it is not possible for the banking sector to lose 25 per cent of its equity and the economy is expected to thrive. Growth is a fiscal phenomenon.”
Sanusi, who said the banks have taken a disproportionae steps towards the manufacturing sector, informed that Nigeria’s inflation is expected to fall below 10 per cent in December, down from the 10.4 percent reported in September, adding that if this is achieved, coupled with the relative peace in the Niger Delta, there should be increased development in the manufacturing sector.
On the report that more foreign lines coming to the country have been stopped as a result of the measures taken by the apex bank against erring financial institutions, the CBN governor said: “Not a single correspondent bank has shut its line against Nigerian banks. Infact, a Commerce bank has just increased its lines to Nigeria”.
He stressed that finance remained the ban of the manufacturing sector, noting that finance is just one component of the real sector.
According to him, “CBN will no longer accept such irregularities because it disrupts proper documentations and any MFBs caught will be punished under the CBN Act.
Most MFB operators believed that within the shortest possible time, the sub sector would no doubt wear a new look, but urged the CBN to ensure that MFBs remain committed on their core objectives of empowering low income earners.
Bumi Lawson, managing director and chief executive officer ACCION Microfinance Bank Limited said that the whole financial industry needs to be sanitised adding that the apex regulatory authority should do the same thing it did to reform deposit money bank.
According to her, “I have confidence that within a short period our financial sector would be solid. The regulatory bodies should not just sanitise commercial banks alone, the MFBs, the Bureau De change (BDC) and the mortgage banks should all be cleaned up to allow for efficiency and good corporate governance.
Speaking further, she said that “CBN really needs to reduce the numbers of MFBs in the country. It is now clear that what CBN was trying to address is the issue on the spread of 860 MFBs, over 70 percent of them are actually in the South-East or South-West. It is obvious that their concentration is quite high. In some places in the North, you could barely find any MFBs but again the number is not the issue what we should be doing is to encourage large numbers of branches.”

Jack Kelly Ruth