Nigeria’s Central Bank recently issued new guidelines for microfinance banks.

The National Association of Microfinance Banks, NAMB, has said that if branches are established in states, more job opportunities will be created at the grassroots.

The National President of the Association, Jethro Akun, said on Tuesday in Abuja that its members expect the various state governments to take up the challenge and establish more of these banks in their domains as a veritable means of channeling micro-credit facilities to low income earners and the poor at the grassroots.

According to Mr. Akun, states must consider the importance of financial inclusion to help people with limited or no access to formal banking services find support to grow their businesses.

He said it is a legal requirement for states and local governments to set aside one percent of their annual budget for micro-credit schemes, adding that the association would encourage the states to use their provision for the establishment of MFBs to encourage financial inclusion.

Mr. Akun commended the Kano State Government for taking the lead in establishing microfinance banks at the grassroots and urged other states to emulate the Kano model, while thanking the Central Bank of Nigeria, CBN, for recently granting operational licenses to 37 microfinance banks in the State.

“To us at NAMB, it is a good development. Looking at it from the surface, it will look as if government is now coming in to run MFBs. But what government is doing is driving development in the sub-sector, because of the passion by government to reduce unemployment, poverty at the grassroots level,’’ he said

The association president said Kano State planned to subsequently divest from the banks and allow the communities or citizens within that local government area to run the establishment.

He expressed the hope that the establishment of more microfinance banks at the grassroots would bring down the interest rate, adding that available statistics from the CBN show that about 56.3 million or 64.1 per cent of Nigerians have no access to formal banking services.

The apex bank, which recently issued a new set of guidelines for microfinance banks in Nigeria, said the sub-sector has the potential to contribute to poverty reduction, economic growth and development.

(NAN)