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By Chinwendu Obienyi
The National Association of Microfinance Banks, Lagos State Chapter, (NAMBLAG), says the quantum of loans so far disbursed and deposit base of Microfinance Banks (MFBs) in Nigeria rose by N1.77 trillion as of June 2022.
Newly sworn-in Chairman, NAMBLAG and the Chief Executive Officer, Richway Microfinance Bank, Adenrele Oni, disclosed this to newsmen during the Association’s 11th Annual General Meeting, (AGM) and Inauguration of New Executive Management Committee which held in Lagos recently.
While hinting that a number of MFBs are fully committed to meeting the Central Bank of Nigeria (CBN)’s minimum capitalisation requirements, Oni revealed that some of the banks are awaiting approval for capital injection and added that a number of the banks have surpassed the capital requirements which is a plus to the sector.
According to him, the Nigerian MFBs have coped admirably well with the current economic uncertainties.
“We have fared very well and as at June 2022, loans disbursed in the sector was about N1.7 trillion and no one would have thought that MFBs would even do as much as that. Also, the deposit base in the sector is sitting pretty over N700 billion and that is massive. I want to assure you that in the next two years, there will be more coming out of the microfinance sector”, Oni said.
He further explained that there have been a number of developments in the sector, adding that the sector witnessed the emergence of a number of digital banks who have come to invest in the microfinance space, bringing a lot of competition, flexibility and a variety of products to the market.
Oni noted that while some players in the sector might not be able to invest heavily on IT infrastructure due to the CBN’s capitalisation requirements, the NAMBLAG will continue to work with a number of Fintech companies to come up with affordable apps that their members can tap into to do online loan, online savings and online collection of loan already disbursed.
He expressed confidence that by the grace of God he would work to improve on the achievements they have recorded in the last few years, stating that his administration has started the journey of capitalisation and FinTech and is committed to continuing that journey.
Earlier in his remarks, the Outgoing Chairman, NAMBLAG and the Chief Executive Officer, Accion Microfinance Bank, Taiwo Joda, revealed that although MFBs in Nigeria have done well in the area of digitalisation, much work as regards collaboration is needed.
“Technology is not cheap and that is maybe one of the reasons why we have not seen a significant number of MFBs having their banking processes fully digitalised because there are few other banks who can pull the financial muscle. But we then look at it and say, you do not need to grow it all by yourself, instead, there can be collaborations with fintechs, technology providers, different digital platforms especially the payment platforms.
There is no need to invest any huge significant amount on IT infrastructure if as a bank you do not have much. Instead what you need to do is to buy and pay as you go. So you don’t need to tie down your capital expenditure. You can buy it and rent or lease technology and pay overtime”, Joda said.
According to him, “the ratio of capital investments in digital technology varies from bank to bank. When it comes to digital technology it is something that has to be driven by the shareholders, and I would not suggest that any bank should put more money into their working capital to drive digital, rather it should be from your return earnings.
It should be from capital from equity in the business”.
