Lagos microfinance banks target N100bn loan in 2012

The National Association of Microfinance Banks, Lagos Chapter, has said that microfinance banks in Lagos state will target a loan portfolio of N100bn in 2012.The Chairman, NAMB, Lagos chapter, Mr. Olufemi Babajide, said at a press conference on Wednesday that the loan portfolio of MFBS in Lagos was currently at N30bn.He added that the banks were currently serving 1.2 million customers out of nine million customers in the state.Our target next year is N100bn, if we increase to that level, we will be serving close to four million. But this will happen with the help from government institutions, he noted.Babajide pointed out that there was no provision of lender of last resort in the policy formation of MFBs, adding that, In other countries, they have provision of lender of last resort in their MFBs policy formation. What we did was to put in place a trust fund on our own, which we called NAMBLAG.The fund could be accessed at interest rate of 25 per cent per annum. This is as a result of the fact that members contribution to the fund is presently nil. Therefore accessed funds will be provided by the trust fund manager and trust fund custodian. As soon as members start to make contribution into the fund, interest rate will come down.He pointed out that the funds would help to boost both short term liquidity management, project financing and refinancing of operators.The NAMB boss had earlier stated that each microfinance bank was expected to contribute N500,000 into the fund.He said, The contributed fund will be matched by the deposit money bank and trust fund custodian. When this is accomplished, the weighted average cost of fund will be reduced. As the fund grows in size and number, government agencies, donor agencies and institutions will be allowed to invest in the fund.
Click here to read full news..