Nigeria: Microfinance Banks Seek New N250 Billion Support for MSMEs

Electricity outages are having an impact on small businesses in Nigeria (file photo).

The National Association of Microfinance Banks (NAMB), at the weekend, asked the Central Bank of Nigeria (CBN) to provide a special N250 billion intervention fund for Micro, Small and Medium Enterprises (MSMEs) in the country to support ongoing economic recovery agenda of the government.

The outgoing President of NAMB, Mr. Rogers Nwoke, made the call during the association's Zoom-powered 10th Annual General Meeting (AGM) held virtually in Abuja.

Mr. Nwoke, who commended the apex bank on its sundry measures to fast-track the nation's economic recovery from the impact of the COVID-19 pandemic, pointed out that since the N50bn intervention fund now being disbursed by NIRSAL MFB could not adequately meet the needs of MSMEs nationwide, the need for additional funding for the enterprises had become imperative.

The chartered banker said in view of the critical roles MFBs played on the MSMEs and micro development of the country, the proposed N250bn should be disbursed through qualified MFBs.

He said, "The role of government in microfinance is to provide an enabling environment for private capital to thrive, and where government chooses to intervene in funding, such intervention should be appropriately distributed to critical stakeholders."

He added that, "Let me use this opportunity to renew our request for a N250bn to MSMEs to be disbursed through qualifying microfinance banks."

Mr. Nwoke urged the CBN to suspend the capitalisation deadline of MFBs to 2023, by which time he said the apex bank would be in a position to properly appraise the level of capital that supported the operations of all MFBs in the country.

He also canvassed the need for the apex bank to urgently review the prudential guidelines to govern the risk classification of MFB loans within the context of the COVID-19-triggered economic lockdown.

He said doing this would help in forestalling quick erosion of the existing capital of MFBs and enable them to sustain their grassroots financial inclusion drive.

The Director, Development Finance of CBN, represented by Dr. Ada Momoh, commended NAMB for its effort to deepen financial inclusion, particularly through funding of MSMEs over the past few years despite the risks.

Similarly, the apex bank's Director, OFISD, Mrs. Nkiru Asiegbu, who was represented by Mr. Michael Daliop, lauded the association, particularly for promoting grassroots economic growth, and assured its leadership of the readiness of CBN to consider its recommendations on the way to adequately fund and grow the informal sub-sector through joint collaboration in order to build a formidable economy.

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