John Shiklam in Kaduna
The Arewa Consultative Forum (ACF) has complained about alleged financial exclusion of the North by the Central Bank of Nigeria (CBN) and suggested ways to deepen the inclusion of the region in the various financial intervention schemes of the apex bank.
In a letter addressed to the CBN governor, Mr. Godwin Emefiele, the forum said the North is being “excluded from critical aspect of the nation’s financial life.”
The letter, which was made available to journalists in Kaduna yesterday, was dated January 29, 2021, and signed by Chief Audu Ogbe, a former minister of agriculture and chairman of the forum.
In the letter, the ACF alleged that Northern Nigeria, which is the most populous region in the country is unserved and underserved.
The forum regretted that government’s policy of financial inclusion targetted at the grassroots may not succeed in the north because many Microfinance banks in the region are not well positioned.
According to Ogbe, “the Microfinance Banks that are looked upon to serve the majority of the people all over the country are not properly positioned to do this.”
He said, “Only one government-owned Micro Finance which is fairly new in the business is being patronised by CBN to disburse intervention funds, thereby neglecting and denying other duly licensed Microfinance Banks across the country the privilege and opportunity to participate in this noble cause”.
Ogbeh said this bank enjoys the unfair advantage of cheap government funds while other Microfinance Banks have to source for expensive funds to compete with the favoured bank in the same market.
The letter argued that for the government ‘intervention funds’ to the economically poor to be successful other strong and reliable Microfinance Banks must be involved.
The letter also criticised CBN’s new capital requirement for Microfinance Banks, noting that, “the astronomical review of CBN’s new capital requirement will see to the demise of most of the Microfinance Banks presently operating in the North.
According to Ogbe, only 310 Microfinance Banks are operational in the north, stressing that with the new policy, only 15 per cent of them will survive.
“This development will further exclude a good part of the north from financial services and inclusion, compound the negative effects of the second wave of COVID-19, aggravate the poverty level of the north and weaken the insecurity of the region”, the letter stated.
The forum also criticised the April 2021 closing date for the recapitisation of the Microfinance Banks and suggested April 2025, pointing out that this will give the banks more time to source for the funds needed at this time of economic depression.
While appreciating the efforts of the CBN in alleviating poverty, Ogbe urged Emefiele to “consider suggestions put by the ACF in good faith.”