The National Association of Microfinance Banks (NAMB) has renewed its call on the Central Bank of Nigeria (CBN) for the involvement of Microfinance Banks (MfBs) in the formulation and implementation of key policies and other measures targeted at enhancing the nation’s financial system stability and sustainable growth.
The association also canvassed the need for the apex bank’s management to help in improving the public confidence in the increasing relevance of the microfinance banking subsector to the nation’s financial ecosystem and by so doing, strongly position the MfBs for improved contributions to the nation’s Gross Domestic Product (GDP).
The NAMB made these recommendations in the communiqué issued at the end of the Emergency Meeting of Board of Trustees (BOT) recently held in Abuja.
In addition to the appeal to the apex bank, the BOT also charged the leadership of the association and other relevant stakeholders to be involved in the implementation of such policies of urgent importance to forestall the crisis that characterised the implementation of the recent cashless and Naira redesign cash swap policy.
In the communiqué signed by the Chairman of the Board of Trustees, Mallam Ibrahim Bamalli; and the BOT Secretary, Dr. Dan Ogun, the Board also tasked the member-banks on internal cleansing and selfregulation required to better position them to impact the economy, and also to embrace digitalization by committing adequate investments to critical e-channel infrastructure for enhanced operations.
The BOT recalled that the implementation of the CBN cashless policy created some challenges for MfBs that seriously threatened many of the member-banks with the attendant negative implications for their efforts to deepen financial inclusion in the country.
Earlier, the BOT noted that the apex bank’s cashless and Naira redesign policy was desirable for the country but that non-integration of the MfBs in the policy formulation and implementation, considering its role as a secondary bank to the people, especially at the grassroots, caused serious hardships for the banks and their customers.
For instance, the Board pointed out that one of the negative impacts of the exclusion of the MfBs from the policy was the high incidence of non-performing loans it triggered in the sub-sector as most of the bank’s clients were cash dependent.
To strongly position the MfBs for fulfilling their mandate, the Board resolved that and directed the National Working Committee to work out the implementation plan for digitalization of all MfBs in the country as it has become expedient for their integration to e-channels of banking operations.In addition, the MfBs were advised to actively participate in and comply with all CBN programme activities and file their reports as may be required by the CBN, intensify their enlightenment and confidence-building initiatives to re-assure customers of the safety of their funds, and develop the capacity and programmes to enable them proactively respond to the emerging technological trends for improved operations and growth.
