Nigeria: CBN to Float Microfinance Fund

Nov 2010
Lagos, November, 05 2010 - The Central Bank Nigeria is to establish a micro-finance fund to support medium to long term lending by microfinance institutions. CBN Deputy Governor, Financial System Stability, Dr Kinsley Moghaiu disclosure this in Lagos yesterday.

He said the Fund, whose modalitiesare being worked out, is part of CBN's intervention programme of empowenng mircro-entrepreneurs by way of enhanced access to financial services.

Moghalu spoke on the theme: "Financial inclusion as a Driver of Growth and Development: Policy Perspectives of the CBN," at a forum organised by EFInA to deliberate on global penpectives on financial inclusion and the launch of EFlnA report on the survey of the 2010 arcess to financial services in Nigeria.

He said the CBN is "preparing ground to establish Micro, Small and Medium Enterprises Development Fund to provide wholesale funding and refinancing facilities for the onlending activities of microfinance banks and institutions."

It was gathered that the new Fund may reach N200 billion.The CBN had in the past established similar intervention Funds such as th cumulative N500 billion Fund established this year for the manufacturing, aviation and power sectors

Moghalu pointed out that the apex financial institution has set up a committee that will conceptualise a framework for an effective financial literacy and consumer protection programme in Nigeria.

He added that the blueprint for financial inclusion will be generated in the first quafier of 2011, stressing that the financial inclusion programme will be driven by financial products. education and infrasnucture.

The Managing Director of EFinA. Ms. Modupe Ladipo, in the summary document, "Financial Servicesl -Landescape in Nigeria",identified three major constraints to financial inclusion in the county - the contextual, regulatory and the systemic constraints.

She however, pointed out that there is hope in view of encouraging signs at the govement and industry levels of a movement towards the creation of a more inclusive financial sector.

The CBN deputy govemor further stated that the monetary authority is making plans towards achieving a comprehensive financial education and inclusion of unbanked Nigenans as a major strategic goal begrnnins in 2011.

He added that the Develooment Finance Function of theC BN is undergoing resructuring to enable it drive more effectively the strategic imperative of financial inclusiong going forward.

Moghalu said the CBN is collaborating with an international organization - Alliance for Financial Inclusion (AFD for a technical assistance programme that will encourage the usage of mobile payment system through mobile phones and the use of the postal system to extend financial services to remote locations.

He lamented that the financial services gap in Nigeria and the financial inclusion challenges are immense, pointed out that the situation calls for the creation of an appropriate and conducive environment for the private sector and other stakeholders to play their own pan.

The challenges. he further explained were the major reasons the CBN launched the microfinance policy in December 2005. 'The CBN is cunently implementing the certification programme for microfinance banks and is supporting the activities of the apex associations of microfrnance banks and the unlicensed microfinance institutions - mostly non- govemmental organisations in collaboration with development partners," he said.

Speaking on the existing efforts of the CBN at financial inclusion, the deputy governor reiterated the fact that under the Commercial Agriculture Credit Scheme (CACS), which was launched with a N200 billion debentureb based fund in 2009. TheCBN has released N8853 billion for 79 projects and 12 state govemments.

Source : ThisDay

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