The Umuchinemere Pro-credit Micro Finance Bank Nigeria Limited, Enugu (UPMFB), has condemned the rising spate of non-repayment of loans, otherwise referred to as portfolios at risk (PAR) in the industry.
The bank disclosed this in its 23rd annual general meeting held in Enugu recently.
This is just as it declared five kobo dividend per share to its shareholders in the financial year ended 2017.
Chairman of the bank and prelate of the Catholic Church, Monsignor Anthony Chukwuma Anijielo, was quoted in a statement to have told the shareholders that bad loans was a major factor militating against the banking sector in Nigeria.
According to him, Umuchinemere Pro-credit Micro Finance Bank was a major victim of the development, as it adversely affected the bank’s performance in 2017 financial year.
He noted that for certain circumstances occasioned by the resultant effects of bad loans that affected the bank’s performance in the year under review, the dividend payable would have been higher.
The bank chief said UPMFB was putting certain measures in check to mitigate the high incidence of portfolios at risk prevalent in the bank sector.
He said for instance that Umuchinemere bank’s “use of the services of credit bureau has enabled the organisation to avoid to a reasonable extent having borrowers with multiple borrowings from other financial institutions.”
Anijielo explained that aggressive loans recovery exercise which the bank’s staff members embark on regularly in clusters of a team has assumed a primary role in saving the life of the bank.
He appealed to the indebted customers not to wait until legal actions are taken by the bank to recover their loans but to spare themselves such embarrassments by repaying their loans promptly.
The bank recorded a sharp drop in profit in 2017 due to bad loans.
The bank’s net profit after taxation at the end of its operations in 2017 stood at N20,450, 744, as against the figure of N38,161,709 the previous year, “a drop that is attributable loans not repaired as at when due,” according to the outgoing external auditors of the bank, Ralph Anyama and Compnay.
Anyama appealed to the defaulting loan borrowers of the bank to “kindly pay back the loans to enable the bank to move on.”
However, in view of the central bank’s new policy raising the capital base for microfinance banks, the UPMFB chairman told his audience that the bank has started the process of beefing up its capital to meet the deadline.
He implored the investors to increase their investments, stressing that “If all the investors will increase their investments in the bank, we will become a national bank.”