Micro credit users advocate liberal requirements to facilitate access

By Babajide Komolafe
Members of the micro business community have called for more liberal credit requirement that will facilitate accessibility to micro credit in the country They also called for cheaper administration of micro credit in order include millions of under_served but economically active Nigerians in the financial system. The stakeholders, who comprised market women, traders, drivers, labour union representatives, community leaders, traditional rulers, state government dignitaries, social groups, artisans and finance experts drawn from a broad spectrum of the economy, blamed the existing banks for the state of the nation’s under_development for their failure to impact on the lives of rural and urban poor by opening channels of credit to them in the past.

Statistical figures provided by the EFinA survey carried out on Nigeria’s consumer perceptions of financial services and issues in 2008 showed that 79 per cent of Nigerians are excluded from formal financial services and that 86 per cent of the rural population are unbanked. The survey attributed the poor rate to high level of financial illiteracy and other related factors.

Expressing their views from different social and economic backgrounds at the one_day Lagos State Conference on credit awareness organized in Lagos by Credit Awareness Nigeria, a Non_Governmental organization that is championing the course of financial literacy and financial inclusion among the under_served in the country, the stakeholders noted that the road to financial inclusion of the poor still remained laden with constraining booby_traps that must be urgently removed in order to increase their contributions to the Gross Domestic Product (GDP) and enhance their welfare. The theme of the national campaign is ‘Safe Savings and Responsible Borrowing’.

According to the participants, the MFIs and deposit money banks (DMBs) have remained largely discriminatory in their credit disbursement as the language, design of their products and delivery of their services over the years had been targeted at the urban elite and alienation of the poor, yet productive rural dwellers and informal sector operators nationwide. They argued further that a review of the existing policy and guidelines on micro credit was required to address the problem of lack of access to funds poor who accounts for about 67 per cent of the GDP.

Setting the tone of discussion at the all_inclusive conference which had in attendance representatives of NAPEP, MFIs, LASMI, CBN, organized labour and traders associations, the Executive Director, Credit Awareness Nigeria, Mr. Ladi Smith, in his opening remarks pointed out that there was no way the problem of poverty and financial illiteracy will be alleviated in the society if the larger majority of Nigerians were denied access to required funds for their socio_economic well being.

He said the NGO decided to take up the challenge of embarking on the nationwide financial literacy campaign as part of its long term objectives of enhancing the level of financial inclusion among Nigerians generally.

In his welcome address, the CBN Governor, Mallam Sanusi Lamido Sanusi, delivered by the Deputy Director, Development Finance, Mr. Akintunde Sowunmi, explained that despite the importance and benefits of credit as well as measures adopted through monetary policy and regulatory guidelines put in place, the problems of illiteracy, gender, irregular income, poor infrastructure and geographical location still remain formidable barriers to efficiently meeting the financial needs of the poor.

The Lead Economist of the World Bank for African Region, Mr. Ismail Radwan in his paper observed that there was a growing need for the banks in the country to respond more positively to the credit demands in the economy as a strategic option of boosting enterprise productivity, adding that the experience of the past showed clearly that the banks failed to channel funds to the real sector as required.

In her contributions during the discourse, the National Leader of Market Women in the country, Alhaja Abibat Mogaji, who was represented by Mrs. Iyabo Moji Dange, advised the banks, especially the MFIs, to package their financial products in languages understood by the rural poor and traders and also deliver them through their organized unions, cooperative societies and other associations so that more of the needy could access credit. This position was supported by Oba Rilwan Akiolu who argued that financial literacy is the bedrock upon which Nigeria’s strive for accelerated economic development can be propelled.

The Conference which will be followed up with Credit Awareness Nigeria’s six_week financial literacy campaign in Lagos State was concluded with a consensual verdict that governments and other regulatory agencies in the country should do more by enlightenment initiatives, more liberalized policy and regulatory frameworks, low interest rate regime on credit and provision of crucial infrastructure to tackle the high level of poverty and unemployment in the country.

The Discussion Panel of the forum comprise the Managing Director of EFinA, Ms. Modupe Ladipo, Managing Director of Accion Microfinance Bank, Mrs. Bunmi Lawson, Executive Director, LAPO, Mr. Godwin Ehigiamusoe, MSME Projects Coordinator of the World Bank, Mr. Emeka Ile, who moderated the session and representatives of the market women, NURTW, Motor Cycle Operators Association and organized labour among others.

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