Nigerian Deposit Insurance Company on Thursday said that the Federal Government had concluded plans to address the challenges facing the microfinance banks.
Managing Director and Chief Executive Officer of NDIC, Mr. Umaru Ibrahim, made the disclosure at the opening of a two-day workshop organised for operators in the microfinance banking sub-sector in Enugu State.
The strengthening of the microfinance banks, he said, would them to provide more ef ficient services to the people in the rural areas.
According to him, the Central Bank of Nigeria is already working on funds, which the MFBs can access at cheaper rates and subsequently lend to their customers.
He stated that the NDIC was also putting in place framework for MFBs with liquidity challenges, which would enable them to approach the corporation for funds to overcome such difficulties.
The NDIC boss, who was represented by the Director, Special Insurance Department, Mr. Bashir Umar, also stated that with the new plan, MFBs would grant facilities and other services to low income earners in the rural areas.
“We will ensure that people have access to appropriate finance that is tailored towards their own needs,” Ibrahim said.
He emphasised that the purpose of microfinance banking was to provide access to funds at the grass roots, saying, “They are supposed to serve the active poor and in that process, transform the rural areas and integrate the rural dwellers into the main economy.”
He, however, admitted that there were difficulties in some areas, hence the need for the workshop to address the challenges for effective services.
He said attempts by the authorities in the past to fill the financing gap were not entirely successful.
“That led to the formulation of the microfinance policy in December, 2005 by the CBN to achieve, among others, the onerous objective of poverty alleviation and promoting economic empowerment of the teeming poor.
“The policy served as blueprint for the establishment of microfinance banks in Nigeria and also opened windows of opportunities for erstwhile existing community banks to migrate to micro-finance banks.”