MICROCAPITAL BRIEF: Nigeria’s National Association of Microfinance Banks (NAMB) Establishes Trust Fund to Provide Funds to Member Microfinance Banks (MFBs)

According to a recent story in the Nigeria-based newspaper This DayLive, the Lagos chapter of the National Association of Microfinance Banks (NAMB), a trade group of microfinance banks (MFBs) in Nigeria, has established the “NAMBLAG Trust Fund.” The fund is intended to provide funding for its members to “shield microfinance banks from liquidity shocks that are currently being experienced in the sub-sector” [1].

Member banks can access a maximum amount of NGN 20 million (USD 12,900) for a period of 30 to 360 days and an interest rate that is set to be between 18 percent to 26 percent. Mr Olufemi Babajide, chairman of NAMBLAG (NAMB Lagos Chapter), said that each member bank is expected to contribute NGN 500,000 (USD 3,200) to the trust fund, which “will be matched by the deposit money bank and trust fund custodian.” Mr Babajide also predicts that as the fund grows, the interest rate will decrease to the single digits and the ceiling of maximum funds that the members can access will also be removed.

By Nisha Koul, Research Associate

About National Association of Microfinance Banks (NAMB): The National Association of Microfinance Banks of Nigeria (NAMB) is a trade group of microfinance banks (MFBs) that merged with the Association of Microfinance Banks in Nigeria (AMBN) in 2009. As of April 2011, NAMB has 820 member MFIs.

Sources and Additional Resources:

[1] This DayLive story, “Microfinance Banks Float Trust Fund,” http://www.thisdaylive.com/articles/microfinance-banks-float-trust-fund/97013/

MicroCapital.org story, May 16, 2011, “MICROCAPITAL BRIEF: Nigeria’s National Association of Microfinance Banks (NAMB) Expected to Form MFB Trust Fund by End of Month,” https://www.microcapital.org/microcapital-brief-nigeria%E2%80%99s-national-association-of-microfinance-banks-namb-expected-to-form-mfb-trust-fund-by-end-of-month/

MicroCapital.org, June 28, 2011, “MICROCAPITAL BRIEF: Central Bank of Nigeria (CBN) Looking to Set New Capital Base Requirements for Microfinance Banks (MFBs),” https://www.microcapital.org/microcapital-brief-central-bank-of-nigeria-cbn-looking-to-set-new-capital-base-requirements-for-microfinance-banks-mfbs/

MicroCapital Universe profile: National Association of Microfinance Banks (NAMB), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=National+Association+of+Microfinance+Banks+of+Nigeria+%28NAMB%29

Browse the MicroCapital Universe and add your entry to the wiki at: https://www.microcapital.org/microfinanceuniverse/

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