Leadership (Abuja)

Nigeria: Expert Advises CBN to Fund Microfinance Banks for Lower Interest Rates

Mr Eniola Agbesoyin, the Chief Executive of Olive Microfinance Bank, on Friday appealed to CBN to support the sub-sector to enable it give loans at single digit interest rates.

Agbesoyin told the News Agency of Nigeria (NAN) in Lagos that the sub-sector was no longer attractive to the active poor because of its high lending rates.

He said that the sector ought to serve the active poor, but was being constrained by under funding.

"The issue of high interest rates in microfinance banks is due to poor funding.

"If we have support from the local and international donors, of course, this will bring down the interest rates to single digit," he said.

Agbesoyin, who is also the treasurer of the Lagos State chapter of National Association of Microfinance Banks, said that currently microfinance banks were giving loans at double digit interest rates.

He said that better funding would galvanise activities in the sub-sector.

"A lot of people who need our services will have opportunity to be served at reduced rates because lending from the CBN always come at cheaper rates," he said.

He said that the sub-sector was committed to empowering the active poor to live above the poverty level.

Agbesoyin said that high lending rates by microfinance banks had led to huge bad loans in the sub-sector.

He said that customers would be willing to repay loans when interest rates were low.

NAN

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