CBN, NIPOST partner to establish National Micro-finance bank

In furtherance of efforts to boost financial inclusion in the country as well as enhance credit to Small and medium scale Enterprises (SMEs), the Central Bank of Nigeria (CBN) is set to launch a new National Micro-Finance Bank (MFB) in partnership with the Nigerian Postal Service (NIPOST).
The new National Micro-Finance Bank (MFB), which is expected to commence operations in January, next year, will have offices in all of Nigeria’s 774 Local Government Areas (LGAs).

The CBN Governor, Mr. Godwin Emefiele, disclosed this at the opening ceremony of the 2018 Annual Bankers’ Committee Retreat in Lagos yesterday.
He said that the national MFB would leverage on the existing NIPOST presence in the 774 LGAs across the nation and improve SMEs’ access to funds under the Apex Bank’s real sector intervention programmes, such as the Anchor Borrowers’ Programme (ABP), the Micro, Small and Medium Enterprises Development Fund (MSMEDF) and the Agribusiness, Small and Medium Enterprises Investment Scheme (AGSMEIS).

The CBN Governor, who noted that SMEs’ access to credit was still a major issue despite the several real sector intervention initiatives launched by the regulator, cited the AGSMEIS, which according to him, was an initiative of the Bankers’ Committee that had so far raked in over N60billion, but was still not being accessed by small businesses.

Emefiele said: “Today, the central bank has N220 billion that is set aside under the micro small and medium enterprise fund. Nigerians were happy when they heard that the banks out of their magnanimity decided that 5 percent of their profit would be set aside to support Agric business and SMEs (AGSMEIS).

“We have over N60 billion under the AGSMEIS currently in the CBN and why should that money be sitting in CBN and just be earning Treasury bill rates. It is meant for the micro small and medium enterprises and for the weak in our economy that would not ordinarily have access to knock at your door.”

“That was why we hinted last week at the bankers’ dinner that a national micro finance bank would kick off by January 2019. In order to collectively address the concerned challenges militating against achievement of the objective of the AGSMEIS initiative, the CBN is considering the proposal to establish a national microfinance bank which would leverage on the Nigerian Postal Service (NIPOST’s) presence in 774 local government areas across the country.”

Continuing, he said: “We have called on NIPOST and they have agreed to join us in this. They would provide their facilities in 774 local governments and this would be their own contribution by way of equity into the establishment of the national MFB. We would provide the infrastructure and this MFB would be available in 774 local government across the nation.”

He further stated that the Bankers’ Committee and NIPOST would have representation on the board of the proposed national MFB, adding that the new financial institution would have a capital base of N5 billion which would be funded through the AGSMEIS fund.
According to Emefiele, the proposed national MFB would be expected to engage in strategic partnership with NIPOST- leveraging on NIPOST locations- while the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL), which is owned by the CBN, would be expected to bring its experience in financing low income entrepreneurs and de-risking credit originated by the national MFB by providing guarantee in line with its mandate.

Stressing the importance of the proposed national MFB, the CBN Governor said: “The task and responsibility to improve our rural communities lies in our hands and we believe strongly that using this infrastructure of the national MFB, we would get to achieve the objective of creating jobs, and enhance the skills of our people in our rural communities, improve and grow the economy so we can achieve the development that we so badly require in Nigeria today.”

He noted the theme of this year’s (10th edition) Bankers’ Committee retreat: “Export-led transformation of the economy-engine for sustainable inclusive growth,” was in consonance with the CBN’s efforts to boost financial inclusion and enhance access to credit especially for SMEs, as it was aimed at ending the nation’s dependence on oil export earnings.