CBN reduces collateral for N220bn fund by 45%

The Central Bank of Nigeria (CBN) has reduced the collateral requirement for the Micro, Small and Medium Enterprises (MSME) Development Fund by 45 per cent from 75 percent announced at the launch of the Fund to enable more small businesses access it.

At the 2016 annual general meeting of the Association of Non-bank Microfinance Institutions of Nigeria (ANMFI) held in Abuja, the President of the Association, Hamid Giwa Afolabi, said the reduction in collateral requirement helped members of the association to access the fund than it did the previous year.

The association’s annual report showed that the ANMFI has a membership base of 4,121 comprising NGO-based micro finance organisations, financial cooperatives, trade organisations and community-based microfinance organisations.

Afolabi urged the CBN to reduce the collateral requirement further to enable more people access it.

“A further reduction to the collateral requirement from 30 per cent to 15 per cent will increase access to finance by the rural populace that the fund is intended to serve,” he said.

The president also said various guarantee windows have helped members’ access development funds that would have been difficult to access without guarantee covers.

“RUFIN/IFAD created guarantee windows for rural MFIs to access finance through the MSME development fund with a 255 guarantee cover,” he