Nige­ria’s MSMEs un­der­funded by N9.6 tril­lion – NDIC

Daily Trust - - BUSINESS - From An­drew Agbese, Kaduna

Medium and Small Scale En­ter­prises (MSMEs) in Nige­ria are cur­rently un­der­funded to the tune of N9.6 tril­lion, the Man­ag­ing Di­rec­tor of the Nige­ria De­posit In­sur­ance Cor­po­ra­tion (NDIC) Al­haji Umaru Ibrahim has said.

Ibrahim, who spoke at a one­day sen­si­ti­za­tion work­shop for op­er­a­tors of mi­cro fi­nance banks in Kaduna, yesterday, lamented the low level of de­posits mo­bi­lized by the 936 mi­cro fi­nance banks, say­ing that by June 2015, the to­tal de­posits stood at only N173.3 bil­lion.

Ibrahim said that though the mi­cro mi­cro­fi­nance scheme was de­vel­oped in re­sponse to the ap­a­thy of other banks to serve the low-in­come seg­ment, cer­tain trends on the global econ­omy re­quires the MFBs to ex­pand their ca­pac­i­ties to ab­sorb risks.

These fac­tors, he said, in­clude the drop in crude oil price by 50 per cent since 2014, in­creas­ing sup­ply of shale oil, im­pact of trea­sury sin­gle ac­count, loss of N1.8 tril­lion public sec­tor de­posits and the im­pact of 7.6 mil­lion illegal im­mi­grants at­tempt­ing to en­ter Euro­pean coun­tries, as well as the re­duc­tion of soft fund­ing to MFBs and NGOs.

“Each MFB faced its own unique set of strate­gic and op­er­a­tional risks which must be iden­ti­fied, mea­sured, mon­i­tored and con­trolled for the in­sti­tu­tion to op­er­ate as a go­ing con­cern,” he stressed.

Ibrahim said the NDIC has in­creased the limit of re­im­burse­ment to de­pos­i­tors, in­clud­ing MFBs, to N200,000 and has de­vel­oped a frame­work for fi­nan­cial as­sis­tance to mi­cro fi­nance banks to as­sist them in over­com­ing tem­po­rary liq­uid­ity chal­lenges.

In ad­di­tion, the NDIC will, in the short­est time, de­ploy dif­fer­en­tial pre­mium as­sess­ment sys­tems in de­ter­min­ing de­posit in­sur­ance premi­ums for MFBs.

Di­rec­tor of the Spe­cial In­sured In­sti­tu­tions Depart­ment, Mr. James Etopi­dok, said the im­pli­ca­tion of the raise in the global poverty base­line for 25 years by the World Bank, which raised its poverty level from $1.9 to $1.25 per day, means that a sta­tis­ti­cal world pop­u­la­tion of the poor is now in ex­cess of a bil­lion com­pared to the 800 mil­lion pre­vi­ously.

He said mi­cro fi­nance banks, de­posit money banks, in­di­vid­u­als and gov­ern­ments should evolve ways of at­tract­ing and fund­ing the MSMEs’ fund­ing gap of N9.6 tril­lion.

“It is, there­fore, im­per­a­tive that MFBs and risk own­ers em­brace and im­ple­ment sound risk man­age­ment if they will be able to con­tinue op­er­at­ing as a go­ing con­cern,” he added.

Newspapers in English

Newspapers from Nigeria

© PressReader. All rights reserved.