The Lagos State Chapter of the National Association of Microfinance Banks (NAMBLAG), a trade group of 820 microfinance banks (MFBs) in Nigeria, has reportedly taken measures seeking to reduce the cost of borrowing to single digit interest rates. The effort is to be facilitated through the NAMLAG Trust Fund, a fund originally established in 2011 to provide funding for Nigerian MFIs experiencing liquidity shocks.

The NAMBLAG Trust Fund plans on funneling funding from donors, development finance institutions (DFIs) and private banks into a pool that will provide support and short-term liquidity to MFIs as well as financing and refinancing facilities in the medium-term to long-term.

According to a statement attributed to Mr Olufemi Babajide, the chairman of NAMB, “as soon as members start to make contribution into the fund, interest rate will come down.”

By Amira Berrada, 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. Its Lagos State Chapter has 180 members as of December 2011.

Sources and Resources:

[1] http://www.businessdayonline.com/NG/index.php/microfinance/34301-microfi…

MicroCapital.org article, January 9, 2012, “MICROCAPITAL BRIEF: Nigeria’s National Association of Microfinance Banks (NAMB) Asks Government Not to Set Up Microlenders” http://www.microcapital.org/microcapital-brief-nigerias-national-associa…

MicroCapital.org story, September 1, 2011, “MICROCAPITAL BRIEF: Nigeria’s National Association of Microfinance Banks (NAMB) Establishes Trust Fund to Provide Funds to Member Microfinance Banks (MFBs),” http://www.microcapital.org/microcapital-brief-nigeria%E2%80%99s-nationa…

MicroCapital Universe Profile: National Association of Microfinance Banks (NAMB), http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Nat…

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