MFBs bridge gap between upper, lower pyramid of a nation’s economy – Caleb Shikir
Mallam Caleb Nuhu Shikir, Executive Secretary of National Association of Microfinance Banks (NAMB) in this interview with EBENEZER ADARAMODU, speaks on the roles Microfinance Banks play in the economic development of a nation.
Shikir has been in the Microfinance banking sector for quite awhile, since the days of Community Banks -spanning 15 years, which has given him the experience to know the sector very well. And as part of his enormous contribution to National Association of Microfinance Bank (NAMB), he was elected into the office of the Executive Secretary.
What do you think is the most attractive policy Federal Government, through MFB, can implement to attract more investors?
Microfinance is an emerging sector, where investors can come and invest. Particularly in the case of Nigeria, we have the population, the resources and what we need from the foreign investors is to showcase and support the current operational activities that we are doing in the sector. We have a lot of people outside that are in need of resources to expand their business. We need to see how we can empower SMEs. All over the world, SMEs are the one that hold the economy of a nation and Nigeria is no exception. We need to see how we make use of Microfinance banks with the foreign investors, we are hoping that the Federal Government create an enabling environment for the investors to come in and invest in the sector.
Many months ago, the Bank of Industry (BOI) and Nigeria Export and Import Bank (NEXIM) signed a MoU with SMEDAN on the rating of Small and Medium Enterprises that will enable the SMEs secure financing from banks; What is your take on this?
It is quite a welcome development, we have been in partnership with BOI, Bank of Africa (BOA). All of them are in the specialized banking sector of the country, where SMEs can have access to funding. I always tell people, it is not just the funding or cash aspect of it. When you talk of capital; it varies. We have human capital, we have resources which is funding, these are areas where if we bring them together, we can build the economy of the nation. We have partnership with BOI, thereby we create avenue for the SMEs to come and access funds. For BOI, we advise strongly that they should really look at the aspect of the SMEs, so that the bulk of operation at the rural areas lies with the activities of the Microfinance banks. So, we expect that BOI should now look at the significance of those at the grassroots where they have no means of funding the SMEs. It then means that SMEs develop their business, it is better for the NEXIM when these people make the production of their goods, they take it for export and that’s why this aspect of agricultural chain value is very important.
What approach should be implemented to sustain revenue growth when banking and capital market organizations fail to get grip with a new competitive era?
The idea of the Microfinance bank in a nation is to bridge the gap between the upper and lower pyramid of the nation’s economy. If the Microfinance banks play thier role as expected, we are trying to encourage and ensure that our members play their roles to meet the needs of those people at the grassroots by the time they increase or carry out their production. By giving money to the SMEs, they would build up their capital base and grow their business and the economy of the nation become better of.
What effort has the CBN provided to boost the Microfinance Bank sector?
We approached CBN to support the activities of the Microfinance Bank, and so far, their support has been so immense and appreciable by approving the purchase of subsidy to the MFBs to acquire the Data Capturing Machines (DCMs) for the sector to improve financial inclusion. We have really been involved in the financial inclusion by our activities as wee go out to sensitize the people at the rural area to ensure that they are included into the mainstream of the economy.
What are the major challenges you have faced so far in the Microfinance banking sector?
We have faced some challenges but one of the major challenges is liquidity. Most of the institutions from my experience are undercapitalized, which is a major component of operational activities of the Microfinance Bank. The other aspect of it is the monetary framework of the MFBs. From experience, the type of operation and mode of MFBS that we have in Nigeria is a bit different from other model of developing nation like Bangladesh, Taiwan, Kenya and so on. Their model is more or less community-based. We also have the challenge of manpower, the sector is not matured enough. Most of us have the concept and ideas of the commercial banks background. So, when we jump into the operation of the MFBs, we operate the activities like normal banking activities, which is not suppose to be. And also, we have the challenge of clients-customers, our borrowing attitude in this country has not been yet understold by most of the borrowers. Often times, when you give customers money, they always believe it is part of their national cake and hardly do they have intention of paying back those funds. Most of the customers, when they get funded, they divert the money into wrong ventures.
Lack of infrastructure and access to IT facilities is also another challenge.
Where do you see MFBs in the next five years?
Recently, we had meeting with one of our key vendors and the aim is for the next two, three, five years, MFBs should operate like every other commercial banks. When the required facilities are in place, any individual can walk into any MFBs, carry out transactions and not nnecessarily go to a commercial banks.
We have also discussed with NIMC. we are trying to see all our branches have a Data Capturing Machines (DCMs) so as to integrate the information and data of our customers.
You are such a busy person, how do you unwind?
Sometimes, I go out to enjoy myself. I love watching soccer game, and also play too. At a certain time, I represented my state (Plateau) which shows that I have huge interest in football. I also have interest in reading newspapers and the activities of journalism.
Is there any partnership between MFBs and football clubs in the Nigeria Professional Football League?
So far, I have not heard of any NPFL clubs partnering with MFBs like I said. I am from Plateau state, and of course, I support Plateau United. I know of one MFB in Jos which is Challenge Microfinance Bank; they are organizing a football club with the sole aim of developing the youth in the capacity of academy. They are doing this as part of their Corporate Social Responsibility (CSR) to the community.
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Business and Lifestyle Editor at Wheel NG