The Nigerian Delta State government is collaborating with the Central Bank of Nigeria (CBN) and Oceanic Bank International (OBI) to create the Delta Oceanic Micro-Credit Scheme Account (DOMSA), it was revealed on October 15th, 2008. In signing a Memorandum of Understanding (MoU), the Delta State government contributed N50 million (USD 424 thousand) in the form of loans to support the first phase of a microcredit trust fund to OBI, while OBI will commit N200 million (USD 1.7 million) to microcredit finance.
The Delta state governor, Emmanuel Uduaghan, said that DOMSA is a microcredit initiative of the Delta Micro Credit Programme (DMCP) and will be implemented using the design of the Central Bank of Nigeria Trust Fund Model. The Delta State Micro Credit Programme (DMCP) was launched in December, 2007 by the Delta State Government and the CBN trust fund model is a scheme developed by the CBN which encourages state governments or blue chip companies to deposit a trust fund amount with a partner lending bank to ensure the banks increase their exposure to farmers.
Dr. Anthonia Ashiedu, the Special Advisor to the governor on the DMCP, informed journalists that small loans will be disbursed to cluster groups at an interest rate of 15 percent, and the CBN will provide a 75 percent guarantee as well as a 40 percent interest rebate on accrued interest. The state government, through DMCP, will identify and introduce viable groups to receive the loans, and the groups are to “show commitment” by opening an account (a DOMSA) and save 20 percent of the requested loan. It is not clear whether the savings is a requirement for receiving a loan.
Oceanic Bank International (OBI) is a commercial bank in Nigeria which was incorporated in 1990, and listed on the Nigerian Stock Exchange in 2004. OBI expanded its products and services in 2007 by adding on new subsidiary companies in areas such as life and general insurance, capital markets, securities and custodian services. Its total assets in 2007 stood at N1.03 trillion (USD 8.7 billion). It was named in 2006 and 2007 as Bank of the Year in Nigeria by The Banker Magazine, and also moved up from 875 in 2007 to 310 in 2008 in The Banker Magazine’s Top 1000 bank rankings.
The Central Bank of Nigeria (CBN) was established in 1958. In September, 2008 it reported assets of N8.4 trillion (USD 71 million). Further stories on the CBN and microfinance can be found in these MicroCapital stories.
By Lori Curtis, Research Assistant
Additional Resources:
The Banker: “Country Awards 2007“
The Banker: “Nigerians corner capital growth share“
Journal of International Farm Management: “Nigeria’s Agricultural Credit Guarantee Scheme Fund“
Oceanic Bank Nigeria: “Balance Sheet“
Oceanic Bank Nigeria: “About Us“
The Tide: “Delta govt unveils new micro-credit scheme“
Vanguard: “Oceanic Bank boosts Delta Micro Credit Scheme with N200m“
Vanguard: “Delta, CBN, Oceanic Bank sign MoU to empower farmers“
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