The Central Bank of Nigeria (CBN) has introduced a special intervention fund for microfinance banks (MFBs) in Nigeria.
The Governor of the CBN, Mr. Godwin Emefiele, said that the aim was to increase the share of micro credit as percentage of total credit to at least 20 percent by 2020 from the current ratio of five percent.
Emefiele said in his keynote address at the just concluded seminar organised by the apex bank for finance correspondents and business editors in Gombe State in northern Nigeria, that while the apex bank was aware of the challenges of the MFBs, it was also aware of their contributions to extending credit to the economically active poor.
“Data from the licensed credit bureaus indicate that the operations of microfinance banks have helped to improve financial inclusion amongst smallholder peasant farmers, artisans and other small business operators.
“As at December 2018, aggregate loans granted by MFBs was N482.896 billion. Of this amount loan sizes below N1.4 million accounted for 72 percent. We equally observed that small businesses have been more successful in securing credit from the microfinance institutions rather than conventional deposit money banks (DMBs),” the report by Vanguard newspaper on Monday quoted the CBN governor as saying.
He noted that the some if the challenges of the MFBs include inadequate spread in the location of the banks in relation to their target beneficiaries, demand for immoveable collaterals for loans, high interest rate, and absence of a credit reporting system.
Emefiele assured that the apex was committed and working assiduously to address these limitations.
GIK/APA