LAPO Microfinance Bank Limited has raised its authorised capital by 75 percent from N2 billion to N3 .5 billion by the creation of 3 billion additional ordinary shares of 50k each, ranking Paris passu in all respects with the existing ordinary shares of the company.
With this increase, the bank would have raised the number of its shares from 4 billion to 7 billion.
Ede Osayande, chairman, disclosed this at the eighth annual general meeting of the bank held on Thursday in Lagos.
The chairman at the meeting announced a 30 kobo dividend payment, which was approved by shareholders.
“What therefore is going to shareholders obviously is minimal and the reason it is 30 kobo is the fact that our share capital in LAPO is small”, said Godwin Ehigiamusoe, managing director/CEO.
He said the bank intends to open up to private investors, especially institutional investors that can add value to LAPO in addition to bringing fund to LAPO, value in terms of their experiences in other jurisdiction, are able to bring value to the bank’s operations, and its governance processes.
“Our expectations are that we continue to do what we do to ensure we meet the demands of our clients and potential clients for loan and secondly to be a bale to deliver some good returns in terms of financial performance”.
In 2018 we disbursed N137 billion to support Micro and Small Enterprises (SMEs) and targets N154 billion for the same reason in the current year.
Ehigiamusoe explained that there is a huge gap between the demand for finance or credit by people at the bottom end that the owner of micro and small business and the available.
“So, as a Microfinance bank committed to supporting that end, our major operation is providing credit. We prioritise giving loans to those businesses. We are also regulated; we can also mobilize deposit but our commitment right from the time we were an NGO, we have always been committed to providing loans to owners of MSME”.
The business environment has been quite challenging for all businesses not only for Microfinance banks, he noted. “Despite that we did our best to deliver our superior financial performance and it is for that reason we are able to provide that dividend for investors,” he said.
According to him, in spite of the challenges in the economy Nigeria has huge potential for Microfinance in the sense that there is a very large population of people and these people are exceptionally very enterprising therefore there is a need to support the sector.
More importantly, he said, it is desired of everyone to ensure that loans to this segment of society come cheaply or cheaper than what it is now. Some solution to that is the need to have a refinancing structure or institution in Nigeria that will be able to provide low-cost funds to Microfinance banks who will, therefore, use such fund for on-lending. The implication, therefore, is the ultimate user that is the borrower will access funds cheaper than what they do now.
Hope Moses-Ashike
