The Central Bank of Nigeria (CBN) unveil it plans to establish Microfinance Bank (MfBs) in all the 774 local government areas of the country.
The Governor of Central Bank, Mr. Godwin Emefiele, announce the plan at Gwagwalada, Abuja while on a facility tour of Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) MfB, an agribusiness initiative which provides risk for framers.
Emefiele said the capital base of the new NIRSAL MfB will initially be N5 billion, stressing that the new initiative which is a collaboration among the Bankers Committe, NIRSAL and NIPOST will see to the establishment of seven MfBs in the six geo-political zones and the Federal Capital Territory (FCT).
Thereafter, he said, the number will be scaled up to 50 MfBs which are expected to become operational in the second phase of the launch of NIRSAL MfB.
The first seven branches to be opened will be located in Ibadan, Port Harcourt, Bauchi, Kaduna, Enugu and Lokoja in addition to the one in Gwagwalada Abuja.
“We are just inspecting one out of the first seven and we are scaling up to the next 50 in the next phase. We believe that before the end of this year, we would have moved substantially in making sure that they are set up and be able to provide finance to small businesses. This is a collaboration between NIRSAL, Bankers Committee and NIPOST and I want to say that we really need to set up MfB that will reach out to the unbanked.”Emefiele said.
The CBN chief lamented the lack of access to cheap finance by small businesses but noted that with the presence of an MfB branch in each local government across the country, the problem would be tackled.
“The biggest problem small businesses always have is access to credit; and I am happy that with the establishment of this MfB which would be in at least one local government and we are talking about the 774 locations in all the country, we would be able to have a financial institution that will help deepen financial inclusion to make it easy for people to access credit particularly the small and unbanked people because we have always said that these are the very weak,” he said.
The creation of NIRSAL MfBs across the country, he said “is to improve access to credit and the technology that would be used will be a FinTech.