MICROCAPITAL.ORG STORY: 'Fidelity Plc' of Nigeria to Offer Banking Service Including Check Clearing to 'Support Microfinance Bank'

According to Marcel Mbamalu of the Guardian in Nigeria, Support Microfinance Bank, a microfinance institution in Nigeria, has entered a “strategic and clearing partnership” with Fidelity Bank Plc, a major universal bank (capable of banking and investment activities) in Nigeria [1,2,3]. Customers of Support Microfinance Bank will now be able to receive banking services, including the clearing of checks, from all 140 branches of Fidelity Bank Plc [1].

According to Mr. Sunday Akhamiokhor-Fred, Managing Director of Support Microfinance Bank, the move came about because it is “generally accepted” that microfinance banks cannot clear checks and because Support Microfinance Bank “[does] not have many branches” compared to Fidelity Bank Plc [1]. Mr. Akhamiokhor-Fred therefore sees this deal as a way to “reach [the bank’s] numerous customers through other means outside setting up branches” [1]. The deal was confirmed by Fidelity Bank Plc as the bank acknowledged that they will honor checks issued by Support Microfinance Bank [1].

Fidelity Bank Plc was founded in 1988 as a merchant bank, before it became a commercial bank in 1999, and a universal bank in 2001 [2]. According to the bank’s latest financial data, Fidelity provided N234 billion in loans in 2008, the equivalent of over USD 1.5 billion [3]. Their assets totaled N585 billion in 2008, the equivalent of over USD 3.9 billion [3]. The bank collected a net interest income of N22.2 billion in 2008, the equivalent of over USD 148 million, and amassed other revenue in the amount of N12.5 billion, the equivalent of over USD 83.3 million [3].

Support Microfinance Bank is based in Ogun, a state in southwest Nigeria [1]. The microfinance bank recently received an award as the best microfinance bank in the region from the Ogun State Government and the Center for Interfaith Action on Global Poverty (CIFA), an organization aiming to “improve the capacity and effectiveness of the faith community in its collective effort to reduce global poverty and disease” [1,4,5]. Support Microfinance does not have a corporate website, and does not report to the MIX Market, the microfinance information clearinghouse [6].

Recently, many Nigerian microfinance institutions (MFIs) have been suffering from poor asset quality, poor governance, and lack of liquidity. These issues have been covered in detail by Microcapital [7,8].

By Christopher Maggio, Research Assistant

Bibliography:
[1] Guardian Nigeria article entitled ‘Microfinance, Fidelity Banks Partner On Clearing’: http://www.ngrguardiannews.com/business/article01//indexn2_html?pdate=181009&ptitle=Microfinance,%20Fidelity%20Banks%20Partner%20On%20Clearing
[2] Fidelity Bank Plc: http://www.fidelitybankplc.com/default.asp
[3] Fidelity Bank Plc financial data 2008: http://www.fidelitybankplc.com/forms/2008_financials.pdf
[4] Ogun State Government: http://www.ogunstate.gov.ng/
[5] CIFA: http://www.cifa.org/
[6] The Mix Market: http://www.mixmarket.org/
[7] MICROCAPITAL.ORG STORY: Nigerian Central Bank Warns Of Increase In Non-Performing Microfinance Loans, Poor Corporate Governance And Commits To Impose Sanctions On Errant Officials At Microfinance Banks: https://www.microcapital.org/microcapitalorg-story-nigerian-central-bank-warns-of-increase-in-non-performing-microfinance-loans-poor-corporate-governance-and-commits-to-impose-sanctions-on-errant-officials-at-microfinance-bank/
[8] MICROCAPITAL.ORG STORY: Nigerian MFI, Integrated Micro Finance Bank Plc (IMFB), Temporarily Closes Doors Due to Lack of Liquidity: https://www.microcapital.org/microcapitalorg-story-nigerian-mfi-integrated-micro-finance-bank-plc-imfb-temporarily-closes-doors-due-to-lack-of-liquidity/

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