The Rivers Microfinance Agency (RIMA) has started making profit but it has put a request for recapitalization of at least N1Bn from its sponsors, the Rivers State government, to make more impact in 2020. The managing director, Ipalibo Watson Sogules, in an interview on the sidelines of the 2019 annual retreat, reveals why the management presses for this instead of demanding for the one per cent of annual capital budget of the state government budget. He told IGNATIUS CHUKWU the Agency’s Microfinance bank, RIMA Growth Pathway, also urgently needs recapitalisation.
Q:
What is the essence of this retreat?
A;
This is our annual retreat and this edition is to strategise for 2020. We are setting targets for ourselves and also measuring performance of the outgoing year. You will recall that prior to 2016, RIMA was posting losses up to N1bn cumulative. Its flagship products, Rural Finance Initiative (RFI) and City Finance Initiative (CFI) witnessed unsustainable overheads, thereby threatening the sustainability of the agency. Coordination of staff was weak and there was no objective performance management system in place.
RIMA started with a takeoff grant of N500m and capital of N2Bn in 2008, but all of this was eroded by 2015, leaving the agency to use financial engineering to survive; through interest on capital placement and an epileptic interest on an unsustainable RFI/CFI scheme.
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You said you gave out N4.7Bn loans between 2015 and 2019,and that you are trying to reach 2,812 entrepreneurs in Rivers State?
In 2015 when we came in, they were operating a programmes called RFI/CFI which was not suitable for RIMA because of huge costs and strength of staff not adequate. So we changed to Market Traders Loan system which helped us to reach the N4.7Bn to that number. We have also introduced loan recovery schemes in collaboration with the judiciary and the police. It is working well.
You said you recorded some giant strides and you made projections in 2020?
Yes, we said we want to achieve N1.644Bn to different enterprises. That will need strategies. So far, we have made about 95 per cent recovery of loans. We also left some structures on ground such as police to recover loans and special court. Our recovery has been good. We are still doing more.
What are doing to introduce proficiency in 2020?
We are asking for recapitalisation and it will come as a booster to us. The governor mentioned recapitalisation in the budget. We are going to adopt risk management to help recover all loans.
Between recapitalisation and asking for RIMA’s one per cent of annual capital budget, which is better or easier?
Going by the law setting up RIMA, it is difficult to ask for that because it was not categorical. For us to pursue that, the law has to be amended. We cannot pursue that. So, we say, let’s recapitalise and move on.
If the governor can give us N1Bn, it will be very good. The last time RIMA was capitalised was 2008, and this has since been eroded.
What has given RIMA advantage in the industry?
Its our staff strength and we have gone into the real micro and small market. Te market has accepted RIMA and that is a huge stride. The demand for our loans is higher than what we can offer.
Do you say your bottom line for 2020 will be positive?
Of course, even in 2019, we broke even and made some profit (about N3m) and we are going to consolidate on this and increase profitability. This is the first time a government agency is giving profit.
You used to have external funding sources such as CBN and some banks, are they all dried up?
First of all, we are a government agencies and any loan we want to go for, we must get the nod of the government for a guarantee. That, we have not got. Once we get the nod, we move because we are working on that.
The MFB was established some years ago, what is the summary of their own side?
Yes, the RIMA Growth Pathway MFB Limited is doing very well and we are also pursuing their own recapitalisation and the CBN has given a deadline for recapitalising all MFBs. But if you look at the bank, 90 per cent of our transactions are done through it. It is being recapitalized and about to open another branch. It is profitable right now. We have instituted ATM system and we have Interswitch; meaning they can transfer funds. These are signs of doing well.
