MICROCAPITAL STORY: Proposperity Microfinance Bank LTD of Nigeria Launches New Line of Microfinance Products

Nigerian microfinance institution (MFI) Prosperity Microfinance Bank Ltd (Pmbank) plans to launch a new set of microfinance products. The products cover a wide range of services and will expand the offerings of pmbank, which had previously been focused on microcredit.

One of the new products is the Prosperity Gold Savings Account, a hybrid between a savings and checking account for businesses, which allows the writing and receiving of checks, pays 3 percent per year interest and has a minimum balance of N10,000 (USD 86). Pmbank will also offer a voluntary High Yield Savings Account for individuals, which will pay interest of 6 percent per year and requires a minimum blance of N50,000 (USD 430). A third savings account, the Micro-Save Account, which will bring services directly to the customers, is focused on businesses that generate cash daily. The account will have a minimum daily contribution of N500 (USD 43) and a minimum balance of N100 (USD 8). No interest will be paid on savings and a 3 percent per year interest rate will be paid on all deposits.

Yet another savings account, the Diaspora Link Account, will be aimed at Nigerians living in other countries around the world. The specific services of this account will be international money transfers, directed savings programs aimed at helping Nigerians abroad save towards visiting home or developing business projects in their native country, and funds delivery directly to relatives in Nigeria. The minimum balance will be N10,000 (USD 86) and no monthly fees will be charged. An interest rate on this policy was not given online.

The bank will also offer insurance policies for individual borrowers who participate in group-based borrowing programs. In the event of the death or permanent incapacitation of the borrower, all outstanding loans from the group borrowing program will be written off. A premium will be charged as an upfront fee at the time of borrowing for those who choose to take advantage of the service. Pmbank will investigate all insurance claims.

Microleases will also be offered without requiring collateral. Appraisals from Pmbank will measure whether the leased equipment can generate enough income to pay back the loan, theoretically limiting the amount of documentation necessary. For leases, the borrowers will need to put down a forty percent deposit on the equipment and borrow the other 60 percent from the bank.

A Business Day article explaining the new products also referred to loans for higher education and legal process outsourcing, as well as investment products, but no further information on these offerings was available on the Pmbank website. Pmbank already offers number of credit programs geared towards individuals and businesses. Many of the individual loan products employ group methodology.

Proposperity Microfinance Bank Limited (Pmbank), located in Benin City Nigeria, was founded in 2005 and has been licensed to practice microfinance banking in Nigeria. According to their website, the vision of Pmbank is “to participate effectively in nation building through the economic empowerment of the common man and be a reference point for total quality banking in Nigeria.” According to Henry Osunbor, head of the bank’s business development department, Pmbank has already extended microcredit to over 15,000 customers. Pmbank is not listed on Mix Market, the Microfinance Information eXchange, nor is an annual report available online. This is the first MicroCapital story on Pmbank.

By Greg Casey, Research Assistant

Additional Resources:

Business Day: “PM Bank unveils sector specific microfinance products”

Prosperity Microfinance Bank Ltd: Home

PM Bank: About Us

PM Bank: Products and Services

Oanda.com: FX Converter