The government of Ebonyi state in Nigeria recently announced that it will disburse NGN 200 million (the equivalent of USD 1.3 million) in microcredit loans at an annual interest rate of five percent to low-income groups and individuals within the year. Mr Sunny Ogbuoji, the Commissioner for Economic Empowerment and Poverty Reduction, made the announcement that the loans would be distributed in two tranches, each of NGN 100 million (the equivalent of USD 650,000). The first tranche will be distributed by next week, allowing 1,489 individuals to each receive loans of NGN 50,000 (the equivalent of USD 330), while 73 groups of ten or more people are slated to receive loans of NGN 300,000 (the equivalent of USD 1,980) [1]. The government of Ebonyi state will work with five unnamed microfinance institutions to disburse and eventually recover the loans.
Last year, the government of Ebonyi state disbursed two tranches totaling NGN 112 million (the equivalent of USD 740,500) to 1,978 individuals and 46 groups. To date, the state has “recovered 45 per cent of the first tranche of the soft loan it disbursed last two years, pointing out that the recovery of the second tranche of the loan would be due in November this year” [1].
By Lindsey Shaughnessy, Research Associate
Sources and Additional Resources:
[1] Nigerian Compass, “Ebonyi tackles poverty with N200m micro-credit loan”, September 13, 2010. http://www.compassnewspaper.com/NG/index.php?option=com_content&view=article&id=67637:ebonyi-tackles-poverty-with-n200m-micro-credit-loan-&catid=42:commune&Itemid=796
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