Current Economic woes negatively Affecting MFBs Operators

Operators of microfinance banks in Nigeria have lamented the current economic situation in the country, stating that if the Federal Government fails to take urgent steps in strengthening the economy, many businesses would fail and microfinance banks would be negatively affected. Speaking at the second edition of the Nigerian Microfinance Platform in Abuja, Chairman, Board of Directors, NPF Microfinance Bank Plc, Mr. Joel Udah, stated that the worrisome state of economic growth and high level of poverty is one of the challenges hindering financial inclusion which is a major platform of microfinance banks. He added that the current economic challenges had brought about a low propensity to save among low income earners and the active poor, who constitute majority of the country’s population. Also speaking, Mrs. Nwanna Joel-Ezeugo, Chief Risk Control and Compliance Officer, Accion Microfinance Bank, said due to the tough operating economic conditions and foreign exchange policy of the government, businesses are finding it very difficult to cope. She blamed the development on the inconsistent policies of the Federal Government which, she said, is stifling businesses. She said, “Microfinance banks actually deal with people at the bottom of the pyramid and I must tell you that the economic situation is not funny. Initially, I thought it was ACCION that was only affected, but from the meeting we had yesterday, where all the managing directors of the Nigerian Microfinance Platform attended, it was the same complain. “The real people in the market are actually finding it very difficult to cope because they are so many inconsistent government policies that are not enabling them to actually run their businesses the way they used to. Of course, if they are having issues, automatically, it would affect their ability to operate effectively with microfinance banks. “The foreign exchange policy is a major issue. The reason being that in the middle of last year, the CBN came up with a list of activities that can be accessed through the official exchange rate. And we know Nigeria has so far been an import dependent economy. When that policy came up, a lot of people were taken away from their jobs and businesses. “And of course, even the increase in the exchange rate,  those that can access official rate, the funds are not available at the CBN, because of the drop in the price of oil and declining reserves. At the end of the day, you find out that either way, the economy is not favourable to the people in the market.” She called on the Federal Government to churn out concrete economic blueprint that would help point out the direction of the country’s economy, stating that “If everyone knows the direction we are heading, we will begin to strategise on how to get there. But where there is no clear cut policy, these inconsistencies will kill more people and throw a lot of people out of jobs