MFBs granted N482.8bn loan to MSMEs in 2018 – Emefiele

Mathew Dadiya

In line with its operational mandate, the Microfinance Banks (MFBs) in Nigeria have given out an aggregate loan of not less than a whopping N482.896 billion as at 31st December, 2018.

The Central Bank Governor, Godwin Emefiele, disclosed this on Friday while delivering a keynote address at the 27th Seminar for Finance Correspondents and Business Editors, held in Gombe State.

The CBN governor, represented by the Deputy Governor, Corporate Communications, Mr Edward Adamu said that of the N482.896 billion, loan sizes below N1.4 million accounted for 72 per cent.

He considered the theme of the seminar: “Repositioning Microfinance Banks for Real Sector Growth,” apt in view of our recent efforts to prime the MFBs as catalysts for financial inclusion and poverty reduction.

He noted that small businesses have been more successful in securing credit from the microfinance institutions rather than conventional deposit money banks (DMBs).

The CBN had, in consistent with its developmental role, in 2005 formulated the Microfinance Policy, Regulatory and Supervisory Framework.

The policy, according to Emiefele, was aimed at bringing microfinance institutions and activities into greater focus in order to deepen financial inclusion and alleviate the financing needs of micro, small and medium enterprises (MSMEs).

According to him, data from the licensed credit bureaus indicated that the operations of microfinance banks have helped to improve financial inclusion amongst smallholder peasant farmers, artisans and other small business operators.

The apex bank governor who acknowledged the challenges confronting the Microfinance banks in the country, said they include: inadequate spread in the location of the MFBs in relation to their target beneficiaries, demand for immoveable collaterals for loans, high-interest rate, and absence of a credit reporting system.

Emefiele, however, assured that the central bank is committed and working assiduously to address these limitations.

He expressed confidence that the participants would at the end of the seminar, have gained greater understanding of the issues and efforts the CBN is making towards growing the economy and addressing some of the binding constraints on development in general.

The media has on important role to play in repositioning the microfinance sub-sector for real sector growth, he stated.

He said, “This forum has also availed us an opportunity to receive periodic feedback from the fourth estate of the realm.

“As always, we seek your partnership inaccurate public information and effective sensitization of the public,” the CBN governor said.

The governor said that the link between microfinance and the real sector was quite strong adding that Microfinance banks are conceived to serve as critical financial lubricants for the real sector, and the pillar of sustained economic growth.

“At the moment economic policy in Nigeria faces a major challenge of reviving growth which is the sure path to ending pervasive poverty.

Microfinance has worked in this regard in many climes and promises to work in Nigeria, if we get it right.

“Accordingly, the Bank, in collaboration with other agencies of Government, is implementing various intervention schemes in addition to promoting microfinance”, he added.