Fred Itua, Abuja
Former Governor of Nasarawa State and a serving senator, Abdullahi Adamu, is raised concerns over Federal Government’s policy. It says if implemented, it might pose an existential threat to the micro finance industry.
Adamu spoke in Abuja at the weekend during the 2019 annual meeting of National Association of Micro-finance Banks (NAMB). The theme of this year’s event was “Sustainable and Innovative digital finance in MSME Development in Nigeria.”
Adamu who served as the chairman of the event, said plans by the Federal Government, through the Central Bank of Nigeria (CBN) to raise micro finance bank capital from N20 million to N200 million could trigger financial crisis in that sector.
He wondered what could have informed such a policy. He said though he is a member of APC, he can’t sit back and allow some persons mislead the administration of President Muhammadu Buhari.
“In April this year, the government served a notice that it would raise the microfinance bank capital from N20 million to N200 miillion from April next year. I do not know the rationale for this new government policy, but I have no doubt in my mind it would be inimical to the growth of that sector.”
the National President of the association, Mr. Rogers Nwoke, in his remarks, said the establishment of Micro Finance Company Limited with an authorised share capital of N500 million would enable the association attract more wholesale capital that will drive fund availability to small scale businesses.
Rogers said the micro finance development company would serve as a special purpose vehicle to manage on-lending wholesale funds for the benefit of the banks and the sector as a whole.
He further noted that the association’s intent of establishing the company is to ensure it reaches out to respective members according to its risk acceptance criteria in terms of making funds available at better rates for easier access to small scale businesses.
On the Micro Finance Development Company, he said: “The company has developed its risk acceptance criteria for each unit of every micro finance bank. We developed different risk acceptance criteria and used them to attend to them according to their size, capitalisation and otherwise. We then give the micro finance banks according to their needs and circumstances.
“Our association in collaboration with all the Micro Finance Banks in Nigeria had set up a company called the Micro-finance Bank Development Company, which has a capital base of N500 million.“
Stating further the associations’s position, he said: “Our position, however is that there should be a micro finance development fund. The intervention fund is great, but not exclusive to Micro-finance Banks. We need that fund to come to micro finance bank.
“There is need to establish a micro-finance development fund, as contained in the micro-finance bank policy framework.”