The Bank of Industry (BoI) has promised to collaborate with microfinance banks (MFBs) in the country to support small businesses and promote financial inclusion.
Managing Director of the BoI, Mr Kayode Pitan, stated that the bank was seeking to align with MFBs to promote financial inclusion and deepen activities among people at the bottom of the pyramid. Speaking at a technical session organised by BoI for MFBs, he said the DFI understood the key role played by micro finance banks in bridging the financing gap experienced by micro enterprises in the Nigerian economy. “In driving economic growth in any nation, it is imperative to ensure that flow of money /capital reaches the bottom of the pyramid, where the majority of the country’s citizenship falls into,” he said. “Whereas formal financial institutions are mandated to provide access to finance to enterprises in the economy, their operational activities are unable to reach the grassroots segments. “This is where the microfinance institutions function as enablers to bridging this financing gap. In countries that have vibrant MSME segments, MFIs have been major contributors to reducing poverty levels and increasing the earning powers of micro enterprises,” he stated.
The BoI boss said Nigeria was not an exception as the activities of Nigerian micro finance institutions, including the licensed MFBs, had led to reductions in the country’s number of unbanked adults. He said there was more to be done to achieve the Central Bank of Nigeria (CBN)’s financial inclusion mandate to reduce financial exclusion rate to 20 percent by 2020. He disclosed that BoI had identified MFBs as key partners to the execution of its Bottom of the Pyramid (BOP) and the Government Enterprise and Empowerment Programme (GEEP), as the banks understood the workings of the customers in the MSME segment “MFBs have a deep understanding of the challenges experienced by these customers especially regarding growth and access to finance. MFBs have deeper geographical spread based on the unit, state and national structure adopted,” he stated, disclosing that the bank had disbursed about N3 billion to over 3,000 under the BOP scheme. He said to date, about N4 billion had been disbursed to qualified beneficiaries in 31 states and the FCT under the GEEP scheme.