The tight monetary policy environment has seen operators of microfinance banks (MFBs) in the country intensifying efforts to increase deposits as well as bank more customers.
The Managing Director, Shalom Microfinance Bank, Erhi Ojoboh said this in an exclusive interview with THISDAY.
According to her, “although it has not been rosy, especially with monetary policy regime, but it has shaped us up to where we now have to do more, invest more in making our presence felt in the market , in cultivating new customers, and in mobilising savings and deposits.
“Business has tightened but we have to strategise to beat the current situation constantly and we are doing everything possible to cope under the current circumstances. Everybody is feeling it, our customers included.
“What we have done is constantly do things differently, innovate, brainstorm, strategise in different ways to be able to cope under this this tight monetary policy regime and we are doing what we have to do to cope under the current circumstances.”
Ojoboh pointed out that access to funding had been a challenge facing operators in the sub-sector, saying that a lot of firms have remained cautious because of the high level of default in the past.
“Getting access to that funding now is quite challenging. In fact, it is non- existent right now. So, we have to look internally to generate funding. I came from a commercial bank, so I understand the dynamics of deposit mobilisation.
“We don’t only focus on loans here. So, for you to be a sustainable microfinance bank, you have to generate savings with which you give loans to your customers.
“So, in terms of funding, there is a bit of imbalance right now but of course we are surmounting the challenge by doing what we need to do,” she explained.
Ojoboh commended the Central Bank of Nigeria (CBN) for its continued support towards the growth of MFBs in the country. Ojoboh disclosed that the CBN has continued to carry out its supervisory function in ensuring MFBs meet the minimum requirements to operate in the sub-sector.
“At a national meeting organised for MFB practitioners in May, the CBN was on ground to give us a talk concerning issues bordering our sector and they reaffirmed their support and also, gave us current information and advice. It was well organised I must say.
“The renewed government interest and improved regulatory environment further creates room for better opportunities for the MFBs to expand and a lot of structure has been put in place in the industry.
“Microfinance banks are well structured and regulated by the CBN.”
Commenting on confidence in the sub-sector, the chief executive said: “Since you are dealing with money, lots of people had their reservations about MFB, they were scared.
“They were not sure about the longevity of the bank, but now it’s better. That’s what we see in the markets. Today, people are more confident, they can give you their money and be comfortable to open a savings account with you, do business and so on.
“Now we have seen that there is a lot of structure in the industry and because CBN also raised the minimum capital requirement for MFBs.”
Ojoboh urged operators of MFBs to remain diligent saying, “Practitioners have to put in a lot more into their staff so that we can revolutionise the industry.
“People say the MFB industry is looked down upon .There is a huge imbalance between micro finance bank workers and commercial bank workers and we should work together to change this perception,” she said.