AVGO.ORG

Nigerian micro-finance banks can now get as much as N1 billion loan to finance small scale businesses in the country through a new partnership between the Suisse Bank Plc of London,Smart Links Limited of Dubai and the African Capital and Business Support Limited.

The loan being offered by the partnership is interest free for the first one year and subject to repayment in four years thereafter,the Vice Chairman of ACBS,Benjamin Aduli said yesterday in Abuja.

Aduli,speaking at a BusinessDay,ACBS Microfinance Banks workshop, gave some conditions under which the nation's microfinance banks can access the loan.

This include ACBS having a non-executive member on the board of the microfinace bank, appointing auditors to ensure the fund is properly managed and the auditors must report regularly the accounts of the bank.This is in addition to the requirement of 51 per cent on non-profit equity as well as a big plan by the bank.

He said there was a huge fund availabe for microfinance banks to invest in, but from the international perspective, MFBs in Nigeria were not ready to tap into the opportunity.

Aduli said the common conditions being required are three years audited accounts and microfinance methodology which most of the MFBs in the country do not have.

He advised the MFBs to concentrate on rural areas and stop looking at the urban centres where they create retail outlets for commercial banks,which are not ready to assist MFBs.

"Microfinance banks should take business to where the commercial banks don't get to."

He said the real challenge facing the MFBs in Nigeria is capital and except real informal people are allowed to operate MFBs there will be no growth,this is even as he warned MFBs not to embark on equity investments.According to Aduli, Nigerian MFBs lack the capacity to take equity investments.

He also faulted the large number of microfinance banks in the country, saying that the 940 MFBs presently in operation are too many."We are currently identifying MFBs with potential to grow big while remaining small."

Also speaking, Mrs Doyin Abiola,one of the strong pillars of MFBs in the country, said the growth of economy lies largely in the MFBs who lend to small scale businesses.