The Governor of the Lagos State Government (LSG), Mr. Babatunde Raji Fashola, announced a new microfinance bill which “will make it compulsory for all local governments in the state to contribute not less than one percent of their allocations to the operations of the microfinance banks in the state,” according to VANGUARD, a Nigerian daily newspaper. The Deputy Governor of the LSG, Mrs. Sarah Sosan, also “urged prospective loan beneficiaries to not see [the new legislation] as a gift, but as repayable obligations,” as reported by THISDAY, another Nigerian daily.
Although specific information was not given, Mrs. Sosan’s comments indicate that the new legislation will call for loans to microfinance institutions (MFIs), rather than grants. In relation to the aformentioned Lagos legislation, a recent MicroCapital article states that the Managing Director of the Royal Trust Microfinance Bank (RTMB) called for similar legislation on a national scale.
The Central Bank of Nigeria (CBN) reports that across the country, “at least 40 million may require [microfinance] services,” as stated in an article by Dr. Bola Fajemirokun, the Executive Director of Development Initiatives Network (DIN). With a population of 17 million, growing at a rate of eight percent, fighting off poverty in the state of Lagos will be an increasingly important goal for the LSG. Established in 1999, DIN is a non-governmental organization (NGO) based in Lagos which produces “qualitative research to promote social justice and development in Nigeria.”
The announcement was made at the commissioning of Berachah Microfinance Bank Limited (BMB) which is set to begin full business operations in the state of Lagos. The Chairman of BMB, Pastor Charles Kpandei, remarked that “the bank would partner with the Lagos State Government in its developmental efforts.”
The CBN, which was established in 1959 and reports March 2008 total assets of over NGN 8 trillion (USD 70.25 billion), shows BMB as a domestically-owned, registered microfinance bank since September 20, 2007. Financial information for BMB was not available.
By Anthony Busch, Research Assistant
Additional Resources:
Central Bank of Nigeria: Home, History, Statement of Assets and Liabilities, BMB
Development Initiatives Network: Home
Lagos State Government: Home, Governor’s Office, Deputy Governor, Population
MicroCapital article, April 24, 2008: “The Managing Director of the Royal Trust Microfinance Bank (RTMB) Advocates Greater Collaboration between Microfinance Institutions (MFIs) and Insurance Firms in Nigeria”
Microfinance Gateway: Home, “New Vista Opens in Banking for the Poor”, by Dr. Bola Fajemirokun, 2007
OANDA: FXConverter
THISDAY: Home, “Berachah Micro Finance Commences Business”, April 10, 2008
VANGUARD: Home, “Lagos Set to Introduce Bill on Micro-finance Bank”, by Michael Eboh and Dotun Ibiwoye, April 18, 1008
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