THE National Association of Microfinance Banks Lagos Chapter (NAMBLAG), has said product innovation, best practices and corporate governance are essential ingredients for Microfinance Banks (MfBs) to survive after the Central Bank of Nigeria (CBN) proposed recapitalisation.
These were the highlights of the Association’s communiqué at the end of a two-day strategic retreat for MD/CEOs of MfBs in Abeokuta.
With: Post recapitalisation, sustainable growth, opportunities and threats, as its theme, it was an intensive knowledge sharing experience between the CEOs of MFBs, research and academic teams, Fintechs as well as regulatory authorities.
NAMBLAG chairman, Mr. Omololu Fatunbi, stressed the need for the MfBs to build on existing synergies within the industry that will enhance the capacity to drive financial inclusion, as well as improve access to credit for low income earners.
One of the keynote speakers, Prof Onafowokan Oluyombo of the Lagos Business School, while analysing the global trend in the financial services space, said opportunities exist for collaboration between the MfBs and other financial services stakeholders but are yet to be fully maximised. These opportunities, he said, include micro pensions, micro housing as well as micro insurance.
To cushion the biting effect of post capitalisation, he said mergers and acquisitions of MFBs, sale to strategic partners, cutting back on excessive expansion and developing individual niche markets, amongst others, could be explored.
Prof Oluyombo cautioned the CEOs to deal with insider abuse among their boards and staff now before recapitalisation, otherwise, it will become a problem in future.
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He advised the MfBs to depend less on foreign fundings/loans because of the unpredictable foreign exchange (forex) rates which can threaten their financial base.
The CBN told the MfBs that it would not set up a Settlement Bank for them, rather, it will assist when the MfBs move in that direction.
Its representative, Mr. Adelana, warned that there will not be any intervention fund for MfBs with above 40 per cent liquidity. He advised them to use their funds lodged in commercial banks.
The apex bank also used the occasion to assess the impact of MfBs on providing access to credits, concluding that from available data, MfBs in the country cumulatively disbursed loans in excess of N1 trillion for 2017. He said this figure was expected to increase last year.
The NDIC, in its submission, stressed the need for improved governance frameworks among the MfBs as a way to sustaining the value creation in the long term.
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