In order to increase access to finance and drive financial inclusion, the International Finance Corporation (IFC) has stressed the need for an improved capital market in Nigeria.
The Vice-President/Treasurer of IFC, Mr. Jingdong Hua, said this at Accion Microfinance Bank Limited’s financial inclusion conference titled: “Making Financial Inclusion a Certainty in Nigeria by 2020,” that took place in Lagos at the weekend.
Hua said Nigeria must develop a vibrant, deep, liquid and open domestic capital market. In addition, he said micro finance institutions’ access to finance for on-lending, would be realised by tapping the capital market.
“The third is through artificial intelligence and through fin-tech, Nigeria can leap frog and really increase the pace of access to finance and increase financial inclusion for all its population,” he added.
He took his audience through experiences from Asia and some other developed countries that had gone through economic downturns at various times and optimally utilised their domestic capital market to improve their economies.
He added: “I always say that Nigeria is to Africa what China and India is to Asia. It is a continental economy and it has to be the strongest economic engine for the continent.
“If you look at China and India, part of the growth task is through developing a vibrant financial system and for this to grow you need entrepreneurship and access to finance.”
Meanwhile, the Chairman of the Board of Directors of Accion MFB, Mr. Patrick Akinwuntan, noted that having achieved a milestone on increased customer base and an impactful loan book, the bank plans in year to come, to increase its shareholders’ base through a public offering and subsequent listing on the stock exchange.
“In long term base, we intend to help Nigerians participate.
Also, some operators and regulators at the event listed lack of infrastructure and access points as major challenges of achieving financial inclusion in the country, even as they noted that the capital base for microfinance banks is not adequate for the volume of financing they need to do.
According to the Chairperson, Board of Directors of Enhancing Financial Innovation and Access (EFInA), Mrs. Module Ladipo, a N20 million capital base does not give MFBs the capacity to meet the huge demand for credit.
She added that there was need to beef up MFBs’ capital base in order to boost market confidence in micro finance institutions in the country.
Also, the National Chairman of the National Association of Microfinance Banks in the country and the Managing Director of Hasal MFB, Rodgers Augustine, saw the need for an increase in the capital base of MFBs.
He noted that a MFBs with a N20 million capital base would not be able to do much.