Microfinance banks (MFBs) in Nigeria are reporting that borrowers are building up such high levels of debt that they are fleeing their homes and, having given false guarantor names, are essentially untraceable.
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MICROCAPITAL BRIEF: Central Bank of Nigeria Revokes Licenses of 224 Microfinance Banks
The Central Bank of Nigeria (CBN), Nigeria’s central banking authority, recently revoked the licenses of 224 of the country’s 820 microfinance banks.
MICROCAPITAL BRIEF: Central Bank of Nigeria to Discontinue Issuance of Universal Banking Licenses, Introduce Three New Banking License Classes in 2011, Microfinance to Fall Under “Specialized” Category
The Central Bank of Nigeria (CBN), Nigeria’s central banking authority, recently announced that in January 2011 it will introduce three new classes of banking licenses—for commercial banking, merchant banking and specialized banking—as well as discontinue the issuance of universal banking licenses.
MICROCAPITAL BRIEF: Government of Ebonyi State, Nigeria, Plans to Disburse $1.3m in Microfinance Loans to Low-Income Groups and Individuals Within the Year
The government of Ebonyi state in Nigeria recently announced that it will disburse NGN 200 million (the equivalent of USD 1.3 million) in microcredit loans at an annual interest rate of five percent to low-income groups and individuals within the year.
MICROCAPITAL BRIEF: Credit Awareness Nigeria Urges Banks to Provide Low-Income Groups with Better Access to Microfinance Products
At the Lagos State Conference on Credit Awareness, Credit Awareness Nigeria, a nonprofit organization which aims to promote financial literacy, recently called on banks to provide low-income groups with better access to financial services.
MICROCAPITAL BRIEF: United Nations Development Programme Indicates 21% of Nigerian Adults Access Financial Services, Provides Support for Microfinance to Central Bank of Nigeria
According to a recent study by the United Nations Development Programme (UNDP), the development arm of the United Nations, a humanitarian organization promoting peace and better living standards, 21 percent of the Nigerian adult population – 18 million people – have access to financial services, with women and youth least likely to have access.
MICROCAPITAL BRIEF: Nasarawa, Nigeria to Establish Microfinance Banks in All 13 Local Municipalities
Alhaji Muhammed Barike Sameel, the State Commissioner of Commerce and Industry for Nasarawa, Nigeria, recently stated that the state of Nasarawa plans to establish microfinance banks in all 13 of Nasarawa’s local municipalities.
MICROCAPITAL BRIEF: More Details Emerge After Examination of Microfinance Institutions (MFIs) by Central Bank of Nigeria (CBN) and Nigeria Deposit Insurance Corporation (NDIC)
Following growing complaints of fraudulent practices leveled against several microfinance institutions (MFIs) and the failure some, the Central Bank of Nigeria (CBN) and Nigeria Deposit Insurance Corporation (NDIC) conducted an examination of the sector, which has revealed some irregularities and unethical practices.
MICROCAPITAL BRIEF: Lagos, Nigeria Cooperative Societies’ Total Capital Reaches $3b
According to the Commissioner for Agriculture and Cooperatives in Nigeria, the aggregate capital base of cooperative societies in Nigeria’s Lagos state has reached NGN 500 billion (USD 3 billion).
MICROCAPITAL BRIEF: African Capital and Business Support (ACBS) Partners with Suisse Bank Plc and Smart Link to Provide $6.7m Line of Credit to Nigerian Microfinance Banks
Suisse Bank Public Limited Company, a private bank based in London, and Smart Link, an Information Technology (IT) consulting group based in Dubai, have signed a deal with African Capital and Business Support (ACBS), a Nigerian financial intermediary, to provide a NGN 1 billion (USD 6.7 million) credit line to Nigerian microfinance institutions (MFIs). According to Mr Bejamin Aduli, the vice chairman of ACBS, the first year of the four-year loans will be interest-free, however, a 9.5 annual percent interest rate will take effect thereafter. To access the credit line, each MFI must have 12 percent of the amount they are seeking on reserve and be majority held by nonprofit interests. Auditors from ACBS will regularly monitor the accounts of the MFIs.
MICROCAPITAL BRIEF: Nigerian Tech Firms Systemspecs and Maxim-Pro to Begin Training Microfinance Institution (MFI) Staff on Integration of E-Payment Service, Remita
A release from the online edition of Nigeria’s Champion Newspaper reports that Systemspecs Nigeria Limited, a software development firm headquartered in Lagos, and Maxim-Pro, a Nigerian technology provider to financial firms, finalized arrangements to begin training for the staff of approximately 125 Nigerian microfinance banks that have recently begun offering Remita, an electronic payment (e-payment) service.
MICROCAPITAL BRIEF: Microfinance Institutions (MFIs) in Nigeria Demand Direct Access to ‘Meso’ Credit Scheme from the National Poverty Eradication Programme (NAPEP)
Microfinance institutions (MFIs) in Nigeria want to bypass commercial banks to access government money in the form of a ‘meso’ credit scheme designed by the National Poverty Eradication Programme (NAPEP) – a government agency responsible for coordinating and monitoring all poverty eradication activities nationwide – to provide loans of between NGN 500,000 (USD 3,300) and NGN 50 million (USD 331,000) for agricultural processing in rural areas. The current regulations mandate that the meso credit funds be distributed to commercial banks for on-lending to qualified microfinance banks at “competitive rates.”
MICROCAPITAL BRIEF: Three Directors of Impact Microfinance Bank Limited Arrested for Fraud in Nigeria
Three directors of Impact Microfinance Bank Limited, a microfinance institution established in 2008 with headquarters in Lagos, have been arrested for fraud. The three men – 49 year-old Innocent Akpan, 45 year-old David Obieke and 45 year-old Joseph Nwabuwanne – were arrested after several depositors complained that they could not access their funds. The suspects allegedly mismanaged the depositors’ money and subsequently could not honor clients’ deposits.
MICROCAPITAL BRIEF: Head of Nigerian Deposit Insurance Corporation (NDIC) Announces Completion of Review of Distressed Microfinance Banks, Outlines Path to “Sanitization”
In a recent interview with Vanguard, a regional publication, Alhaji Umar Ibrahim, acting Managing Director of the Nigerian Deposit Insurance Corporation (NDIC), shed light on the ongoing efforts to revitalize the Nigerian microfinance sector. Mr Ibrahim revealed that NDIC examiners had recently finished a comprehensive review of distressed microfinance banks. He stated that many of these banks have not been paying government fees and that many are facing insolvency.
MICROCAPITAL BRIEF: International Finance Corporation (IFC) Partners with eTranzact to Launch Rural Telephony Project (RTP) MobileMoney in Nigeria
The International Finance Corporation (IFC), a member of the World Bank Group, has partnered with eTranzact, an online payment system based in Nigeria, to launch Rural Telephony Project (RTP) MobileMoney. The goal of the program is to reach rural people in Nigeria – who often lack access to banking services – through the use of mobile phones.
MICROCAPITAL BRIEF: ACCION Microfinance Bank of Nigeria Posts $500,000 Profit
ACCION Microfinance Bank Limited of Nigeria has reported an after-tax profit of NGN 75.92 million or the equivalent of USD 500,000 for the period ended December 31, 2009, compared to a reported loss of NGN 67.47 million or the equivalent of USD 400,000 for the year ended December 31, 2008.
MICROCAPITAL BRIEF: KfW Entwicklungsbank (KfW) and Norwegian Microfinance Initiative (NMI) Commit Total of $11.6m to Goodwell West Africa to be Invested in Microfinance Sector in Ghana and Nigeria
Goodwell West Africa, a branch of Goodwell Investments, a business development company based in the Netherlands, has received commitments of EUR 8 million (USD 9.7 million) from KfW Entwicklungsbank (KfW), a German development bank, and EUR 1.6 million (USD 1.9 million) from Norwegian Microfinance Initiative (NMI), a strategic partnership between the Norwegian public and private sectors that invests in and provides support for microfinance institutions (MFIs) in developing countries. The funds will be invested in established MFIs as well as emerging MFIs in Ghana and Nigeria.
MICROCAPITAL BRIEF: Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) Signs “Memorandum of Understanding” with Six Microfinance Banks
The Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) has signed a “memorandum of understanding” with six microfinance banks in order to facilitate the provision of microcredit for small and medium-sized enterprises across the country. The six microfinance banks that will receive grant money from SMEDAN are Misau Microfinance Bank in Bauchi, Kada Microfinance Bank in Kaduna, Safeline Microfinance in Abuja, KRGY Microfinance Bank in Jigawa, Atlas Microfinance Bank in Abuja, and Fahimata Microfinance Bank in Kaduna.