The Central Bank of Nigeria (CBN), in collaboration with the Bankers Committee, and Nigerian Postal Service (NIPOST), have announced plans to establish a 5 billion naira NIRSAL Microfinance Bank, with branches situated in all the 774 local councils in Nigeria.
While inspecting one of the branches at the Gwagwalada Post Office, Abuja, the CBN Governor, Godwin Emefiele noted that seven of the branches have already commenced operations.
The aim of the project is to fast track the financial inclusive project and boost economic diversification.
Emefiele said NIRSAL Microfinance, which will offer 9 year tenor loans at 5 percent rate is very competitive, unlike other microfinance banks whose lending rates are almost beyond the reach of the ordinary citizens. He said the project will be used as a collateral under a seven year tenor, plus two years moratorium.
According to Emefiele, “this is a collaboration between NIRSAL, Bankers Committee, and NIPOST, and I want to say that we really need to set up microfinance banks that will reach out to the unbanked. The biggest problems that small businesses have always had is access to credit; and I’m happy that with the establishment of this microfinance banks, with at least one located in each of the 774 local governments in the country, we would be able to have a financial institution that will help deepen financial inclusion”.
He added that “this will 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”.
Highlighting the strategies to be implemented to ensure the project is a success, the CBN Governor said “we use this to improve access to credit and the technology that would be used will be a fintech technology. We have already set a target for ourselves that by 2020, the rate of financial inclusion must increase to 80 percent from about 48 percent a year and a half ago. So this is just part of our initiative to deepen financial inclusion in Nigeria”.
He said the loans will be disbursed through the Bankers Committee’s AGMEIS scheme, being five percent of profit after tax set aside by banks to support small and medium enterprises (SMEs) in agriculture or other small businesses badly in need of finance to scale and enhance their competitiveness and profitability.