Central Bank of Nigeria (CBN) and the Bankers’ Committee will by January 2019 leverage the Nigerian Postal Service (NIPOST) to establish the National Microfinance licence banks in 774 local governments across Nigeria.
This is part of efforts to enhance access to finance by Small and Medium Enterprises (SMEs), create jobs and promote financial inclusion.
The NIPOST will provide the facility as its equity contribution while the CBN and the Bankers’ Committee will provide the infrastructure.
Godwin Emefiele, governor of CBN, disclosed this in Lagos at the 10th annual Bankers’ Committee retreat themed ‘export-led transformation of the economy – engine for sustainable inclusive growth.’
The National MFB will operate with N5 billion capital base funded through the Agri-Business/Small and Medium Enterprises Investment Scheme (AGSMEIS).
The CBN governor said the Bankers’ Committee and NIPOST would have representation on the board of the proposed national MFB.
Emefiele was concerned that access to credit by SMEs was still a major issue despite the several real sector intervention initiatives launched by the bank, like the AGSMEIS, which he said was an initiative of the Bankers’ Committee that had so far raked in over N60 billion, but was still not being accessed by these small businesses.
“Today, the central bank has N220 billion that is set aside under the micro small and medium enterprise fund. Nigerians were happy when they heard that the banks out of their magnanimity decided that 5 percent of their profit would be set aside to support Agric business and SMEs (AGSMEIS),” Emefiele said.
Speaking further, he said, “We have over N60 billion under the AGSMEIS currently in the CBN and why should that money be sitting in CBN and just be earning Treasury bill rates. It is meant for the micro small and medium enterprises and for the weak in our economy that would not ordinarily have access to knock at your door.”
The proposed national MFB would be expected to engage in strategic partnership with NIPOST- leveraging on NIPOST locations- while the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL), which is owned by the CBN, would be expected to bring its experience in financing low income entrepreneurs and de-risking credit originated by the national MFB by providing guarantee in line with its mandate.
“The task and responsibility to improve our rural communities lies in our hands and we believe strongly that using this infrastructure of the national MFB, we would get to achieve the objective of creating jobs, and enhance the skills of our people in our rural communities, improve and grow the economy so we can achieve the development that we so badly require in Nigeria today,” he said.