As part of the government’s 4-year plan on poverty alleviation, the Ondo state government has been making large strides in increasing accessibility to micro-credit loans to its people. According the government, these loans have reached 27,208 people over the course of the program’s implementation.
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NEWS WIRE: EU to finance new micro projects in Nigeria’s Niger Delta
The European Union (EU) is to spend more than 1.5 billion naira (about 11.6 million U.S. dollars) on 335 additional micro projects in six states in Nigeria‘s oil rich yet restive Niger Delta.
A statement from the EU said on Friday that the projects would be implemented between May and October this year.
Grameen Foundation Supports Citibank’s USD 1mm Financing of Nigerian Microfinance Institution LAPO
Citibank, part of the Citigroup global financial services company, will provide a USD 1mm Nigerian naira equivalent structured loan through it’s subsidiary, the Nigerian International Bank (NIB), to Lift Above Poverty Organisation (LAPO), a Nigerian microfinance institution (MFI). The loan is supported by a USD 500,000 guarantee from the Grameen Foundation. The deal is LAPO’s first commercial transaction with a bank, and the first transaction between Citibank and a Nigerian MFI. The investment comes at a time when many Nigerian MFI’s are struggling to meet minimum capital requirements (see previous article on microcapital.org) among other standards to be introduced in forthcoming regulation of the industry, due to be enforced by the Central Bank Nigeria (CBN) in December 2007 (see previous article on microcapital.org).
Mergers and Acquisitions in Nigerian Microfinance to Ease Compliance with Forthcoming Regulation
Central Bank Nigeria (CBN) has endorsed a broadening of mergers and acquisitions among existing microfinance institutions (MFI’s) or ‘community banks’ so that they can comply with minimum capital requirements which are part of forthcoming regulation. The regulation, which requires all such organisations to register as microfinance banks by December 2007 (see previous article on microcapital.org), requires a minimum capital base of 20mm Nigerian naira (USD 156,500) for ‘state community banks’ and NGN 1bn (USD 7,824,000) for ‘federal community banks.’ After a meeting between CBN and the National Association of Community Banks of Nigeria (NACOB) Abdulgadir Bauchi, president of NACOB, said “community banks can now go into mergers and acquisitions so as to meet the deadline given by the apex bank to transform to microfinance bank[s].”
Nigerian Microfinance Institution LAPO Receives a USD 1.04 mn Loan from CitiBank Enhance by a USD 500,000 Guarantee from the Grameen Foundation
Another story courtesy of the CGAP/MIX capital markets newsletter. Nigerian microfinance institution (MFI) Lift Above Poverty Organization (LAPO) received a USD 1.04 mn loan from Citibank. The loan was enhanced by a USD 500,000 guarantee from the Grameen Foundation. LAPO was established in 1987 to provide microloans, voluntary saving services, and training and consulting. They reported to MIX market, the microfinance information clearinghouse, as having USD 11.3 mn in total assets and a gross loan portfolio of USD 7.8 mn spread among over 84,000 active borrowers as of 31 December 2006.
Central Bank Nigeria (CBN) Prepares for Microfinance Certification Programme to Commence in 2008
Following news that the Central Bank Nigeria (CBN) would impose new regulations on microfinance banks last year (see article on microcapital.org) the CBN is preparing a systematic certification programme for microfinance banks operating in Nigeria. When the regulations were announced last year the deadline imposed for microfinance institutions (MFI’s) to comply with the new measures and convert to microfinance banks was December 2007. Once this deadline has passed and the micro-banks are all regulated, the certification process will begin (January 200). It forms part of a capacity building programme to try and make the domestic microfinance industry more robust and transparent. The CBN intends to base the certification on international best practices, and expects to enforce compliance with the certification requirements within 3 years.
Nigerian Association of Small-Scale Industrialists Plans to Launch Microfinance Bank
The Nigerian Association of Small-Scale Industrialists (NASSI), Federal Capital Territory (FCT) Chapter will soon launch a micro-finance bank with capital totaling USD 162,946,729 through a private placement. The NASSI is a private sector organization founded in 1978 and registered under the Land Perpetual Succession Act. It was organized to promote grassroots economic empowerment, facilitate the creation of employment, and increase the productivity of micro and small industrialists through advocacy programs, and information and communication networking. NASSI does not report to the MIX Market, the microfinance information clearinghouse and no other information is publicly available about its performance.
Impulse Microfinance Investment Fund offers USD 393,960 credit line to Nigeria’s LAPO
News coming to us courtesy the MCM newsletter, Nigeria’s Lift Above Poverty Organisation (LAPO), a non-governmental organization (NGO) has received a EUR 300,000 (about USD 393,960) credit line from Impulse Microfinance Investment Fund. As per information available, this is the only Africa investment that Impulse has made. In November 2006, LAPO was honored at the Grameen Foundation’s Microfinance awards for Excellence in Microfinance.
The Grameen Foundation’s Microfinance Awards Honors LAPO of Nigeria, Pro Mujer Bolivia, and the Ford Foundation’s Asset Building & Community Development Program
The Grameen Foundation presented its annual Microfinance Awards this year on November 9, 2006 in New York City. LAPO of Nigeria received the Excellence in Microfinance Award and Pro Mujer Boliva received the Pioneer in Microfinance Award. A third award was introduced and presented to the Ford Foundation’s Asset Building & Community Development Program, a program that develops models to measure how the lives of microfinance clients have changed.
Continue reading “The Grameen Foundation’s Microfinance Awards Honors LAPO of Nigeria, Pro Mujer Bolivia, and the Ford Foundation’s Asset Building & Community Development Program”
Exxon Mobil Loans $130,000 to Eleven Nigerian Microfinance Institutions
Exxon Mobil loaned $130,000 to eleven microfinance institutions in Bonny Island, Nigeria. The loans were offered at “minimal interest rates”, and will benefit about 650 residents of the Rivers State island (based on the average Nigerian’s loan of $50).
Continue reading “Exxon Mobil Loans $130,000 to Eleven Nigerian Microfinance Institutions”
Intercontinental Bank Plc of Nigeria Plans Microfinance in Ghana
Nigerian Bank åö Intercontinental Bank Plc has acquired CITI Savings and Loans Ltd, a microfinance institution (MFI) and transformed it into a bank. The bank will be known as Intercontinental Bank Ghana Ltd, Ghana’s 25th bank. The bank has announced its intent to use this institution to expand microfinance operations in Ghana.
Continue reading “Intercontinental Bank Plc of Nigeria Plans Microfinance in Ghana”Nigerian Government and Zenith Bank Lend $940,000 to Local Microcredit Initiatives
The Nigerian government announced $940,000 in microcredit loans to citizens and small business groups. According to The Tide, Nigeria’s capital city newspaper, “no fewer than 1080 groups will benefit from the microcredit scheme.” Agriculture-focused initiatives will receive $658,000, while the remainder will be used for trades training. The loans were financed jointly by the government’s National Poverty Eradication Programme (NAPEP) and Zenith Bank.
Continue reading “Nigerian Government and Zenith Bank Lend $940,000 to Local Microcredit Initiatives”Central Bank of Nigeria Approves 8 Organizations to Operate as Microfinance Banks
The Nigerian Central Bank recently approved eight organizations åö including United States-based ACCION åö to act as Microfinance Banks (MFBs) in the country. The other seven organizations are Lagos-based Susu, Integrated MFB, MIC, Wize Trade, Mustasons, the Osun State College of Technology, and First Global MFB of Port Harcourt.
Continue reading “Central Bank of Nigeria Approves 8 Organizations to Operate as Microfinance Banks”
Nigeria Central Bank Holds Workshop on New Microfinance Policy that Invites Microfinance Investment
This month, the Central Bank of Nigeria (CBN) held a workshop designed to educate the public on the new microfinance policy framework released in December 2005. (See Microcapital Blog 7/3/06). The workshop is part of a campaign to sensitize stakeholders (the Nigerian government, Central Bank, the MFIs themselves, public and donor agencies) to the opportunities derived from the new policy program.
Nigeria Strengthens Microfinance Sector with New Regulations for Community Banks
Under Nigeria’s new national microfinance framework, all community banks must convert to microfinance banks and comply with the new regulations by the end of 2007, 24 months from the approval date of the policy. Community banks which fail to increase their capital from the prior requirement of 5 million naira (USD $40,000) to 20 million naira ($161,000) will cease operations. The Central Bank of Nigeria’s (CBN) survey shows that a minimum of 50 million naira ($400,000) is needed to provide effective banking services. Since community banks based in rural areas may be unable to raise that much in shareholder’s funds, a lower requirement was set.
A Nigerian community bank is a “self-sustaining financial institution owned and managed” by the community which it serves. (p.26) The National Board for Community Banks issued provisional licenses to 1,366 community banks from 1990 to 1997; the CBN was responsible for issuing the final licenses after two years of operation.
Continue reading “Nigeria Strengthens Microfinance Sector with New Regulations for Community Banks”
Belgian Incofin Makes Over $400,000 Microfinance Investment, Buying Shares in Peruvian Edypme Confianza and Lending over $300,000 Investment in Nigerian Lift Above Poverty Organisation (LAPO)
Edypme Confianza, a Peruvian microfinance institution (MFI) created in 1997 to provide microfinance services to entrepreneurs and small producers, sold shares worth $405,280 to Incofin. Initially, Confianza was primarily an agriculture lender, but changed its lending practices in 2002 and expanded its portfolio to include urban and individual loans. This MFI had $17 million in total assets, over 17,000 active borrowers, and a loan portfolio of $13.7 million at the close of 2004. Edypme Confianza also reported total equity at $3 million, return on assets (ROA) as 1.3%, return on equity (ROE) as 7.2%, a debt to equity ratio of 465%, and a 6.7% profit margin at the end of 2004. According to an Inter-American Development Bank (IADB) survey based on number of loans outstanding in Latin America, Edypme Confianza was ranked 53rd overall and 12th within Peru.
Incepted in Belgium in 1992, Incofin invests in MFIs in 16 countries, and in mid-2005 had total assets of $5.6 million. The duration of Incofin’s loans, which are between $120,000 and $600,000, is five years, and the terms offered are “LIBOR plus full cost plus full risk”. Shareholders include both corporations and private individuals and Incofin invests in equity, quasi-equity, debt securities and guarantees. Although Incofin does not provide a return, it has the objective of maintaining the initial value of the shareholders’ investments.
Incofin also provided Nigerian-based Lift Above Poverty Organisation (LAPO) with a $306,000 loan. LAPO is an African NGO established in 1987 with a mission “to promote economic empowerment through financial services on sustainable basis.” In September, 2003 LAPO reported a loan portfolio of $1.2 million and total assets just under $2 million.
SPECIAL REPORT: Positioning MFIs to Access Climate Finance – An Interview with Kwashie Agbitor of Accion
A seat next to Kwashie Agbitor (pictured below) was one of the most highly sought-after spots at SAM 2023 in Togo in October. Mr Agbitor has 20 years of experience in Africa and Asia, improving branch operations, credit appraisals, risk management, methodology auditing, product development, client protection and social performance management.
At SAM 2023, Mr Agbitor moderated a discussion titled “Climate funds, an opportunity for financial institutions to scale up sustainable and inclusive financing.” The panelists represented the Tunisian microfinance institution (MFI) Enda Tamweel, the Belgian impact investment firm Incofin, the Kenyan microlender Juhudi Kilimo and the French impact investor Solidarité Internationale pour le Développement et l’Investissement (SIDI).
Bob Summers: How can financial services providers (FSPs) work with climate funds to expand their green lending portfolios?
Kwashie Agbitor: There are numerous opportunities for financial institutions to build their green portfolios with climate funds. Financial institutions can leverage equity, debt and quasi-equity sources of funding from various types of organizations. Climate funds can be used to develop and deploy financial services that support the adoption of green products/solutions and help people recover from climate-related shocks. Given their nature, most climate funders also provide technical support/assistance in addition to funding.
BS: What factors influence whether a climate fund would invest in a particular MFI?
KA: Firstly, the MFI and the investor must
MICROCAPITAL BRIEF: Lipa Later Acquires Fellow E-commerce, DFS, Merchant Services Platform Sky.Garden of Kenya for $1.6m
Lipa Later, a Kenyan financial technology (fintech) firm integrating e-commerce, digital financial services and merchant services in four African countries, recently paid KES 250 million (USD 1.6 million) to acquire Sky.Garden, a Kenyan service that was launched in 2017 but had announced it would close during 2023.