The Lagos State Microfinance Institution (LAMSI), a government agency, is giving N850m (USD 7.3m) to five microfinance institutions (MFIs), including Integrated Microfinance Bank (IMB), LASU Microfinance Bank, MIC Microfinance Bank, Gapbridge Microfinance Bank and Ojokoro Microfinance Bank. Applications from other MFIs are still being evaluated.

These MFIs are not controlled by the government and at least some are for-profit institutions. The government, however, has created a special investment committee to monitor the organizations and their use of state funds. LAMSI will release the money in pieces to ensure that it is used in line with the government’s intentions. The organization has scheduled N1.4b (USD 12m) for provision to MFIs this year.

This announcement comes soon after the Nigerian central government restructured its support for small and medium sized enterprises SMEs by creating the N50b (USD 431m) Micro Credit Development Fund. The fund replaces the Small and Medium Enterprises Equity Investment Scheme (SMEEIS), which was a plan for financial institutions to make direct equity investments into SMEs. To learn more about the new fund and its predecessor, please read this previous MicroCapital story.

By Greg Casey, Research Assistant

Additional Resources:

The Nation: “SME: Lagos, five microfinance banks plan N50m intervention fund“

MicroCapital Story, July 22, 2008: “Why the Central Bank of Nigeria’s Small and Medium Enterprises Equity Investment Scheme (SMEEIS) was Replaced by a Fund for Microfinance”

MyNaijaNews: “Fashola Inaugurates Board of Trustees of State Micro Finance Institutions”

Punch: “Five microfinance firms to access N50bn in Lagos”

Oanda.com: FX Converter

Integrated Microfinance Bank: Home

Gapbridge Microfinance Bank: Home

AllAfrica.com: Nigeria: ‘N50bn Micro-Credit Fund for Poverty Alleviation’

MicroCapital Story, February 22, 2008: “Nigerian Government Creates $426m Microcredit Development Fund“