LAPO Microfinance Bank Limited is optimistic of meeting the N152 billion loan target for this year, its managing director/CEO, Godwin Ehigiamusoe said in Lagos.
This is coming at the bank has already disbursed about N90 billion to low income earners in the Micro, Small and Medium Enterprises (MSMEs) sub-sector of the economy.
Meanwhile, the Non-Performing Loan (NPL) ratio of the bank is put at between 5 and 11 percent, which is above 5 percent regulatory threshold. However, Ehigiamusoe said the bank will improve on this subsequently.
This according to the managing director was as a result of harsh operating environment and the prevailing economic downturn.
The bank has championed several initiatives in the sector that would help maintain its dominance position in the industry such the claim energy lending, the affordable housing, and sustainable finance among others.
LAPO which provides a range of unique financial and social empowerment services to low income earners in the country and across the African region.
The bank has developed critical mass and physical structures in terms of service outlets that would help drive its growth in a sustainable manner.
“If you combine all we do in the microfinance sector, it may not be up to what the big banks will do but in terms of spread and touching the lives of the people, we are there. The sector has potential for growth, this is a country of close to 200 million and this is a country of exceptionally enterprising people and when you have such a thing like this, microfinance is also very useful.”
“We have reached millions of Nigerians with a range of financial services and many have moved on. We current provide loans and savings opportunities to over 4 million. There is also an unintended impact or benefit, that is impact on youth unemployment, because at the beginning it was not on our list of objectives. But today we have 7, 012 largely young people on our full time staff list. And over 8,000 in the LAPO System”.
Responding to the impact of CBN and Bankers Committee setting up NIRSAL Microfinance banks across 744 local governments, on microfinance banks, he said the initiative would make the institutions more vibrant and provide better services to the borrowers especially in the areas of interest rate reduction.
“The market reality is that the supply gap at the bottom end of the economy is still huge and any initiative that will support bridging the gap is welcome.
“Also, the ensuing competition will be of benefit to the microfinance sector and the services users. For us at LAPO the initiative is welcome as long as the microfinance banks will be rn on sustainable basis for the benefits of the ordinary Nigerians”.
Responding to factors impeding optimal operations of Micro finance banks in Nigeria, he said: “The big issue is funding. They came up with microfinance development fund and to an extent, that is a good intention, again since microfinance is not basically a business, it is first and foremost development, I think the issue of rebate or tax consideration would have been given to Nigerian microfinance banks but that is not giving at all.”
Speaking at an interactive session with the media in Lagos, Dorcas Osahenrumwen, head of alternative channels group, said the bank is currently leveraging on technology to drive this expansion.
“We have currently 1,273 agents across 30 states in Nigeria and our agents provide account opening services, deposits, withdrawals, mini statements and currently we are working on adding services like interbank transfer, and the rest on this agent network for us to sell more,” she said.
Osahenrumwen further said that “Alternative channels means finding alternative ways to offer services and products with technology this started in 2015 and the first project was an agent network, a provider of agent of network and we went into that with just about 10 locations”.
