Written by Sarah NEGEDU

NIRSAL MFB’ll create healthy rivalry –Emefiele

When fully functional, the proposed NIRSAL Micro Finance Bank is expected to provide single digit interest loans of five percent to small businesses across the country, the Central Bank of Nigeria has revealed.

The Governor, Central Bank of Nigeria, Mr. Godwin Emefiele, while allaying fears that the establishment of a national MFB may crowd out existing ones, said the NIRSAL MFB will rather complement their services and provide more access to credit finance for the unbanked group.

Speaking during an inspection of the bank’s facilities in Gwagwalada, Abuja, Emefiele said the bank will also create healthy competition for existing microfinance banks in the country

“The existing microfinance banks are doing their best and I’ve heard this is an attempt to crowd them out but this is not an attempt to crowd them out. It is to complement their services and see to it that whatever services are provided by these microfinance banks should be fair to their customers,” he said.

“I also know rural communities where the microfinance banks charge very prohibitive interest rates but here we are talking about making fund available to these people. This will help to create some form of competitive landscape so that those kinds of practices will no longer arise,” he explained further.

The NMFB is a brainchild of the Bankers’ Committee, the Nigeria Incentive-Based Risk Sharing System and the Nigerian Postal Service.

The Bankers Committee provided the set-up equity capital and owns 50 percent of the bank, while NIRSAL and NIPOST own 40 percent and 10 percent, respectively.

He said the target was to have 774 branches in all the local governments in the country. So far, seven had been established with another 50 branches being planned in the next phase.

The governor said the establishment of the NMFB with a capital base of N5billion would help deepen financial inclusion as well as enable the CBN to achieve its 80percent financial inclusion target by 2020.

He said the loans would be given out of the Agribusiness/Small and Medium Enterprises Investment fund at five percent interest rate with a repayment period of seven years and a two-year moratorium.

Emefiele said with this, “We will be able to have a financial institution that will help to deepen financial inclusion to make it easy for people to access credit, particularly the small and unbanked people, because we have always said that these are the very weak.

“We will use this to improve access to credit. Interest rate for this will be at five percent and the loan will be for a tenure of seven years with two years moratorium.”

On the issue of collateral, Emefiele said the loans would be given without the conventional collateral requirements.

Search

Latest posts

PhotoFG gives agencies matching orders to sanitise public exams

The Federal Government has ordered agencies conducting public examinations in the country to clean up their registration processes to restore credi [...]

19 May 2019

PhotoEFCC: Journey to Jabi, one year after

On April 10 this year, the Economic and Financial Crimes Commission, EFCC, clocked 16. By all measures, it has been 16 years of command performance [...]

19 May 2019