Their are arrays of Micro-finance banks in Nigeria. The city of Lagos has at 200 MFB’s scattered all over town. All Micro-finance banks in Nigeria Numbering about 9000 in the year 2012, raised the sum of NGN 125 billion (USD 770 million) in revenue for a total of NGN 97 billion (USD 600 million) in disbursed microloans to a client list of approximately 6 million members.
So, if these “Small Banks” handle such sums collectively, what exactly is their Role in the Nigerian Economy?
Before anything is said, lets get the basics.
Micro-finance Banks are banks established to meet the needs of low income earners of the society.
At their level, Micro-finance banks provide loans, accept deposits, provides insurance, perform funds transfers, and other ancillary non-financial products targeted at low-income clients.
Their are 3 features that distinguish Micro-finance Banks from other financial institutions.
It should be prime objective of a good micro-finance bank to enhance the improvement of people in poor living conditions.
Micro-finance banks are key players in poverty alleviation because they are the Banks that are closer to the grass-root people. Because they specialize in the provision of credit facilities to individuals as well as businesses, the government is quick to partner with them for Accessible disbursement.
For example, the Lift Above Poverty Level (LAPO) is an NGO that runs a micro-finance bank in Nigeria. LAPO is a pro-poor financial institution committed to the empowerment of low income earners and petty traders.
Micro-finance banks provide a platform for people with business ideas to bring their dreams to reality. Gone are the days when people think business is only for the rich and influential.
Now, anyone can start a small business and walk into any micro-finance bank for a loan to start the business.
DO YOU KNOW THAT YOU CAN ACCESS LOANS CHEAPER UNDER A MICRO-FINANCE BANK?