Financial expert wants microfinance banks return to original mandate

A financial expert, Mrs Frances Beckey, has urged microfinance banks to return to their original mandate of intermediating in small and medium scale enterprises for economic growth.

Beckey gave the advice in an interview with the News Agency of Nigeria (NAN) in Lagos.

The expert said that some microfinance banks had made their services inaccessible to the common man.

Beckey described such an attitude as unhealthy to the Nigerian economy.

According to her, some microfinance banks are operating only for traders, contractor and importers.

“This explains the cut throat interest rates microfinance banks charge, which tend toward commercial banking.

“Some operators have gone berserk, using micro credit as a profit-making model.

“This contradicts the definition and objective of non-collateral loan for low income generation activities of poor people,” she said.

The expert told NAN that only a paradigm shift in operations would reposition microfinance banks to benefit from the nation’s enormous market.

“Microfinance banking is not about pooling money out of poor people; it is a shelter for the poor,” she said.

She urged microfinance banks to support numerous emerging businesses.

Beckey said that microfinance banks had failed to utilise opportunities in the nation’s informal sector to generate profit and promote self-reliance.

“That there are lots of opportunities in the microfinance sub-sector in the country is unarguable”.

Source : Independent

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