GROUP TWOSUPPORT TO MICRO FINANCE

INSTITUTION (MFI)

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ISSUE ONE: Institution Building Among MFBs

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• Facilitators:1.Mrs. A.U. Ufaruna M&E Specialist (RUFIN

CPMU) (Lead Facilitator)2.Mr. Adedeji Y. Adesemoye, Asst. Director OFRD

(CBN)3.Dr. M.N. Kolo, Programm Manager NACRDB4.Mr. Femi Olaleye, RUFIN CPMU• Rapporteurs• Lizzy Igbine (Mrs.) Niwfa• Christ John Mamuda (JP)• Ernest Awakessien• Group Membership - 32

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1. The MFBs in Nigeria require further capacity building to deliver on their services and reach more clients (revitalization).

2. Criteria for MFB participation:• Must be registered with CBN.• Must be rural based.• There must be evidence of outreach to the rural poor.• Must be RUFIN project states.• Must show commitment to participate in RUFIN• Must be a viable MFB (outstanding performance that represent best

practice.3. The group agreed that to mitigate the uneven distribution of

MFBs, the following should be done.• A. Non bank financial institutions and cooperative should be

encouraged to spring up in those areas where MFBs are none existent.

• B. MFB should partner with MFI/cooperative to create presence in those areas.

• C. CBN should evolve friendly policies and an enable environment for more MFB to spring up.

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4. The Technical Support for MFB in three major areas:-• A. Technical - Capacity Building & Training• B. Structural - Equipments & Logistics• C. Financial- Linkage to refinance windows• Recommended Training Areas:• 1. Corporate governance.• 2. Investment/Treasury Operations• 3. Deposit Mobilization• 4. Marketing System.• 5. Accounting System.• 6. Client Relationship Management.• 7. Product Development.• 8. Cash Flow Analysis Technique• 9. Credit Management.• 5. The role of Stakeholders• A. MFBs• Develop relevant products.• Beneficiaries• Patronage• Service Providers• Relevant trainings

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6. The proposed amendment for RUFIN• A. RUFIN should promote financial literacy for

the rural populace.• RUFIN should promote support for consumer protection

and Micro-finance Banks service.• RUFIN should promote a partnership model between

MFB and cooperatives, groups and unions in rural areas.

7. The Expected result• MFBs would have been capacitated to go into rural

areas to deliver financial services to more clients.• Access to financial services (savings/credit) would have

been enhanced in rural areas.• Food Security would have been increased.• Increase to means of livelihood and wealth creation in

rural areas.• Increase client outreach would have been achieved by

MFBs.6

ISSUE TWO: Capacity Building among Non Bank MFI

• Non bank MFI are NGOs, traditional money lenders, cooperatives, credit unions, & self help groups, that are involved in the services of savings mobilization and lending in rural areas.

2. Things that should qualify organizations to be RMFIs are:

• 1. Legally registered under the appropriate law.• 2. Must be in the services of savings, borrowing

and lending money in micro form to its rural clients and members.

• 3. May be membership base.• 4. Must be rural base.• 5. May be NGO type

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3. The capacity building critical to RMFI:• 1. Leadership/corporate governance training.• 2. Savings mobilization.• 3. Product development.• 4. Record/Book keeping for RMFI.• 5. Membership mobilization for RMFI.• Proposal writing.• Partnership development process and linkages

framework etc.

4. The Technical Support for RMFI• Sensitization/awareness campaign for RMFI on their

critical roles.• Advocacy for support for RMFI.• Operating manuals/standards.• Provision of information on Training available from

development partners. 8

5. The Roles of Stakeholders In the implementation of this activity:• Identified Stakeholders are RUFIN, MFI, MFB, NGOs.• The stakeholders should serve as link with rural populace, farmers/women

groups.• The MFB & MFI should have relevant products for their clients.• Beneficiaries should increase patronage (savings/loan).

6. Proposed amendment for RUFIN• Develop manuals (Templates) on operations for RMFIs.• RUFIN should commission a study on the activities of RMFI to understand

their challenges/constraints and develop appropriate intervention areas.• Develop a model for them to key in.

7. Expected Results:• 1. Building sustainable institutions providing sustainable services.• 2. Building micro entrepreneurs with access to finance.• 3. Increased income/asset and wealth creation for the rural populace.• 4. Achievement of the MDG goal of eradicating extreme poverty.• 5. Fostering gender equality and empowerment of disadvantage

groups.• 6. Improve standard of living.• 7. Rural transformation.

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ISSUE THREE: SUPPORT FOR NACRDB• The current areas of operations are:

– Provision of affordable credit to the less privileged.– Acceptance of savings deposit.– Encouraging the formation of Cooperative societies.– Inculcation of banking habits at the grassroots.

• Areas where support is necessary for NACRDB are:– Training for desk officers on RUFIN project.– Infrastructural i.e. computers.– Logistics and project vehicles.– Increased funding for the bank by paying up equity for improved outreach.– NACRB should do more micro-lending.

• 3. The Type of Support that are relevant:• Infrastructural - equipments• Logistics - vehicles• Training - for staff• Expected Results• 1. Effective & efficient service delivery to the target beneficiaries.• 2. Positive impact on the target beneficiaries.• 3. 70 – 85% repayment target will be achieved.• 4. Increased beneficiaries standard of living.• 5. There will be improvement on the income of the target beneficiaries.• 6. Increase client outreach.

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ISSUE FOUR: IMPLEMENTATION, SUPPORT, REGULATION AND SUPERVISION FOR MFBs

• ISSUES FOR DISCUSSION• 1. The supervision for MFBs should be under the CBN, more

CBN branches be strengthen to carry this function.• 2. The current CBN regulatory model should be re-

strengthened to ensure efficiency and effectiveness of MFBs.• 3. To sanitize the widespread of distress of MFBs, it is

herby resolved that:• A. Policies should be evolved to ensure good corporate

governance in all the licensed MFB.• B. The CBN should ensure enforcement of the prudential

requirement guidelines to protect depositor’s fund.RUFIN/CBN should facilitate continuous capacity building

and development in the subsector.• C. The board/management of MFBs should be suitably

qualified, experienced and certified micro finance practitioners.

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4. The Technical Support required to achieve the goals of this sub-component

• Trainings• Corporate Governance• Credit Process• Banking/Treasury Operations.• Investment/Finance.• Savings and deposit mobilization.• Risk Management• ICT/MIS Platforms.• Accounting System/Records• Internal Audit/Control5. The roles of stakeholders in the implementation of this activity:

1. Formation of a National Micro finance policy consultative forum.

2. Provision of private sector driven credit Bureau to mitigate credit risk of MFBs.

3. Establishment of a MFB umbrella association.

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6. Proposed amendment to RUFIIN• Advocacy on financial literacy and consumer protection.• Promotion of good corporate governance by MFB/MFI.• Promotion of collaboration between MFBs with

development partners to leverage on existing knowledge/support.

• Expected Result• 1. Access to sustainable financial services to

rural/vulnerable populace.• 2. Achievement of MDGs goals and eradication of

extreme poverty.• 3. Enhance households to improve their nutrition,

children education, health and general living standards.• 4. Mainstreaming the informal sector of the economy

into the national financial system.• 5. Contribution to rural transformation. 13