Phillip Isakpa, editor, BusinessDay, has challenged operators of Microfinance banks (MFBs) in the country on the need to promote financial literacy and consumer protection to enhance financial inclusion.
This is following the huge financial literacy gap at the lower end of the banking sector which may have contributed to a large number of the adult population, about 34.9 million, being excluded financially.
Although it is the responsibility of the government to promote financial literacy, Isakpa told operators of microfinance banks at a workshop organised by the Nigeria Deposit Insurance Corporation (NDIC) in partnership with BusinessDay that rather than waiting for when the government will do this, they can in their own interest promote financial literacy in order to get on board those that are excluded financially.
Making a presentation on ‘Promoting Financial Literacy and Consumer Protection in the Microfinance Banking Sub-Sector’, the editor charged them on the need to provide useful information that will aid the understanding of their business.
“The business is not profit making first but has to be driven by passion to help the poor. A lot of the people you are dealing with do not understand finance in terms of savings. You could design products that meet specific need of the people”, he said.
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According to him, despite the increase in retail financial services, consumer protection and financial literacy remain weak in developed and developing countries alike.
He urged middle and high income countries to develop national strategies for financial education, starting with national financial literacy surveys.
Responding, operators were worried over the cost of promoting financial literacy using the media in the face of liquidity challenge confronting the sub-sector.
However, they solicited the collaboration of the regulators and the media on the promotion of financial literacy and consumer protection.
Godwin Ehigiamusoe, managing director/CEO, LAPO Microfinance Bank, stated in his presentation on ‘Nigerian Microfinance Practice: LAPO Model’, that the success of LAPO’s operating model with its specific features was made possible by commitment and desire of its leadership to defer immediate gratification, integrity and great staff relationship.
In his presentation on ‘Critical Appraisal of Management Information System for Microfinance Institutions’, Hassan M.G., managing director of NPF Microfinance Bank, said Management Information System (MIS) is critical to microfinance bank’s ability to achieve the desired outreach and remain sustainable.
Edna Ishaya, managing director/chief executive, CR Services Limited (Credit Bureau), told participants that enthroning sound risks management is a key function of good corporate governance as there cannot be good governance in a financial institution that is not managing risks particularly in today’s electronic world and the challenges with security the world over.
