Mr Olufemi Babajide, Chairman of the Lagos chapter of the National Association of Microfinance Banks (NAMB), a group of Nigerian microfinance institutions (MFIs), recently revealed that past due loans outstanding to MFIs in Lagos total NGN 10 billion (USD 64 million). Mr Babajide also argued in favor of establishing special courts to try loan defaulters. The current system classifies loan default cases as civil matters, resulting in trials that are lengthy and expensive for MFIs, he said. Furthermore, Mr Babajide claimed that some customers deliberately default on their loans saying, “To my surprise, some of the customers are doing it with criminal intention. There is a need for customers – that are not willing to pay – to be criminalized.”
The Nigerian MFIs reporting data for 2009 to the US-based data provider Microfinance Information Exchange (MIX) have aggregate total assets of USD 85.2 million, gross loan portfolios totaling USD 64 million and 440,000 active borrowers.
By Julie Moksim, Research Associate
About National Association of Microfinance Banks (NAMB): The National Association of Microfinance Banks of Nigeria (NAMB) is a trade group of microfinance institutions that merged with the Association of Microfinance Banks in Nigeria (AMBN) in 2009.
Sources and Resources:
The Guardian: “Lagos Microfinance Banks’ Customers Default by N10b”, February 10, 2011
MicroCapital.org Brief, January 31, 2011: Central Bank of Nigeria (CBN) Highlights Failings of Local Microfinance Industry, Outlines Strategies Going Forward, https://www.microcapital.org/microcapital-brief-central-bank-of-nigeria-cbn-highlights-failings-of-local-microfinance-industry-outlines-strategy-going-forward/
MicroCapital.org Brief, October 4, 2010: Nigerian Microfinance Bank (MFB) Stakeholders Urge Staff Training to Combat High Delinquency Rates, Borrowers Reportedly “Fleeing” Town When Unable to Repay,https://www.microcapital.org/microcapital-brief-nigerian-microfinance-bank-mfb-stakeholders-urge-staff-training-to-combat-high-delinquency-rates-borrowers-reportedly-fleeing-town-when-unable-to-repay/
MicroCapital’s Microfinance Universe Profile: National Association of Microfinance Banks (NAMB)
Browse the MicroCapital Universe and add your entry to the wiki at: https://www.microcapital.org/microfinanceuniverse/
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