MICROCAPITAL BRIEF: President of the Nigerian Association of Small and Medium Enterprises (NASME) Cites Lack of Skilled Workers as Reason for Failure of Microfinance Institutions (MFIs) in Nigeria

Dr Ike Abugu, President of the Nigerian Association of Small and Medium Enterprises (NASME), has called the lack of skilled workers employed in microfinance as the reason why he feels microfinance has been unable to impact the economy and fulfill its promise. Dr Abugu commented, “The kind of people that went into microfinance was spillover from the commercial banks so they still had this banking mentality. They did not have the skills, knowledge and expertise to run microfinance banks.”

He was also critical of the spending habits of microfinance institutions (MFIs). He said, “I have been to a microfinance bank… in the Philippines, Asia, and what they use in their offices, including the managing director‘s office are plastic chairs. This is because the cost structure of the business itself cannot accommodate expensive furniture. That is why our microfinance banks are having problems. They want to be like the commercial banks.”

Dr Abugu’s comments follow recent criticism from the President of Nigeria, Goodluck Jonathon, of the MFI sector. President Jonathon lamented the fact that MFIs were not meeting their mandates, and he challenged the Central Bank of Nigeria to come up with a “comprehensive policy” that would help to develop the microfinance sector.

By: Christine Chang, Research Associate

About Nigerian Association of Small and Medium Enterprises (NASME):

The Nigerian Association of Small and Medium Enterprises (NASME), established in 1996, fosters the promotion of micro-, small and medium-sized enterprises (MSMEs) in Nigeria. NASME was created by promoters of MSMEs in the private sector and agencies of the government of Nigeria.

About Central Bank of Nigeria (CBN):

Central Bank of Nigeria (CBN) is Nigeria’s central banking authority, established in 1958. Some of the regulatory objectives of CBN as follows: to issue legal tender, to maintain the external reserves of the country, to promote monetary stability and a sound financial environment, and to act as a banker of last resort and financial adviser to the federal government.

Additional Resources:

Microfinance Africa website: Why microfinance banks failed – NASME president, May 18, 2010: http://microfinanceafrica.net/news/why-microfinance-banks-failed-%E2%80%93-nasme-president/

Microfinance Africa website: MFBs have failed Nigerians – Goodluck Jonathan, April 30, 2010: http://microfinanceafrica.net/news/mfbs-have-failed-nigerians-%E2%80%93-goodluck-jonathan/

MicroCapital Universe: Nigerian Association of Small and Medium Enterprises (NASME): https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Nigerian+Association+of+Small+and+Medium+Enterprises+%28NASME%29

MicroCapital Universe: Central Bank of Nigeria (CBN): https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Central+Bank+of+Nigeria+%28CBN%29

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

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