Home Business News CBN's decision to establish NMB is counter-productive -NAMB

CBN’s decision to establish NMB is counter-productive -NAMB

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National Association of Microfinance Banks (NAMB), has called for full implementation of the National Microfinance Policy (NMP) in the application of intervention funds. NAMB made this call in a reaction to the establishment of a National Microfinance Bank (NMB).

According to NAMB, the decision of the Bankers Committee and the Central Bank of Nigeria (CBN) to set up a National Microfinance Bank (NMB), in collaboration with Nigerian Postal Service (NIPOST) runs counter-productive to the salient objectives of the NMP, Regulatory and Supervisory Framework for Nigeria as well as the objectives of the National Financial Inclusion Strategy.

NAMB said that the CBN/Bankers Committee should utilize existing touch points and offices of existing microfinance banks which meet approved criteria to disburse its intervention funds including, but not limited to the Agri-Business, Small and Medium Enterprises Investment Scheme, ACGSMEIS as well as Micro, Small and Medium Enterprises Development Fund, MSMEDF, among others.

The association added that equity funds for the planned NMB should be channelled to support the NAMB initiative for a private sector-led Microfinance Development Company Ltd to manage a Microfinance Development Fund as provided for in the NMP.

The statement read; “This would be a sector-based source of wholesale funding and refinancing for the microfinance subsector.

“The CBN/Bankers Committee should consider a super agent banking license to NIPOST. NAMB is willing to partner with NIPOST as a super-agent for delivery of financial services across the 774 local government areas. There is a need for an urgent engagement and dialogue between NAMB and the Bankers Committee to consider modalities and options for optimal utilization of the various intervention funds, particularly, the ACGSMEIS Fund by MfBs and effective linkage between the commercial banks on the one hand, and MfBs on the other for the purpose of on-lending.”

What you should know about the NMP

The National Microfinance Policy was established to create an enabling environment that promotes the development of appropriate and innovative microfinance products and services to meet the real needs of the low-income population. It also enhances economic growth and accelerates poverty reduction.

More so, the CBN introduced a Microfinance Policy Framework to enhance the access of microentrepreneurs and low-income households to financial services required to expand and modernize their operations in order to contribute to rapid economic growth. The rationale was that no inclusive growth can be achieved without improving access of this segment of the economic strata to factors of production, especially financial services.

Nairametrics had reported that CBN’s wholly owned Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) unveiled its new national Microfinance Bank (MFB), which is expected to take off in February 2019.

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