The National Association of Microfinance Banks (NAMB) has urged monetary authorities to widen the scope of their policy actions in order to better fund the country’s Micro, Small, and Medium Enterprises (MSMEs).
The call was made by the President of NAMB, Malam Yusuf Ahmed Gyallesu at the end of NAMB’s 11th Annual General Meeting (AGM) in Abuja.
To enhance MSMEs’ productivity, Malam Gyallesu suggested the Central Bank of Nigeria might create linkages between Deposit Money Banks (DMBs), development banks, and other specialized financial institutions.
He said, “What the microfinance subsector needs now is funding to be able to support MSMEs. This funding can come in the form of interventions specifically designed and targeted at the MSMEs to be routed through MFBs.
“Another avenue is for CBN to foster linkages between the DMBs, development banks, and other specialised financial institutions such that MFBs can source wholesale funds and refinancing facilities from them in order to widen their outreach and for on-lending to the MSMEs at relatively cheaper costs.
What this means
There is a need for a linkage between DMBs, development banks, and other specialized financial institutions to increase access to capital for MFBs.
Hence, this would lead the MFBs to expand their reach and lending to MSMEs at lower rates, further accelerating the growth of the Nigerian economy.
In case you missed it
The Central Bank of Nigeria had advised microfinance institutions against engaging in certain prohibited activities, including wholesale banking and foreign exchange transactions.
CBN said, “The CBN would continue to monitor developments in the MfB sector and apply stringent regulatory sanctions for violations of extant regulations, including revoking licenses of non-compliant MFBs.”