The Central Bank of Nigeria (CBN) has identified low access to the N220 billion Micro, Small and Medium Enterprises (MSME) development fund to poor status of participating finance institutions (PFIs), specifically microfinance banks.
The PFIs include microfinance banks, microfinance institutions, financial cooperatives, finance companies, and deposit money banks – Bank of Industry (BoI) and Bank of Agriculture (BoA).
The CBN is concerned that microfinance banks have about 70 percent portfolio-at-risk (PAR) with negative shareholders’ fund, a development that has declared most of them ineligible for the fund.
The CBN disclosed that about N769 million of the fund has been accessed by six participating finance institutions while N1.3 billion has been released to state governments for lending through microfinance banks.
Meanwhile, one deposit money bank has accessed N50 million for SMEs lending while five deposit money banks including UBA, Skye Bank, GTB, Zenith Bank and Fidelity Bank have signed Memorandum of Understanding (MoU) with the CBN for the fund.
Mudashiru Olaitan, acting director, development finance department, CBN, who was represented by Babatunde Ogulaja, assistant director, development finance department, CBN, disclosed this at the ongoing business editors and members of Finance Correspondents Association of Nigeria (FICAN) in Katsina State organised by Nigeria Deposit Insurance Corporation (NDIC).
According to him, the CBN is making microfinance banks which are about 900 to go through house cleaning.
“We have about 900 microfinance banks, a good number of them have stomach ache. A lot of things are wrong with them. We are making them to go through house cleaning”, he said.
Wednesday, 3 December 2014
CBN links low access to MSMED fund to poor status of PFIs
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Wednesday, December 03, 2014
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