The Global Initiative Microfinance Bank Limited (GIMFB), a Nigerian microfinance bank (MFB), reportedly has released two new products with the aim of minimizing bad debt: GIMFB village banking and GIMFB medal deposit accounts. According to a statement attributed to GIMFB Chairman Mr Clementre Doregos, group lending is essential to maximize repayment because “individuals who comprise a group…can devise means of accessing funds from deflating individuals because they know it is their responsibility to make sure every member of the group pays as and when due.” Group lending also reportedly helps MFBs control their costs by serving multiple borrowers in the same place, rather than sending staff to each individual borrower’s home.
The 40 Nigerian microfinance institutions (MFIs) that reported 2011 data to the US-based nonprofit data provider Microfinance Information Exchange (MIX) held an aggregate loan portfolio of USD 185 million disbursed to approximately 977,000 borrowers.
By Charlotte Newman, Research Associate
About Central Bank of Nigeria
The Central Bank of Nigeria (CBN) was established in 1958 as Nigeria’s central banking authority. As defined by the Act of Parliament that created CBN, its statutory mandates are as follows: “to issue legal tender currency; to maintain external reserves; to safeguard the international value of the legal tender currency; to promote monetary stability and a sound financial system in Nigeria; and to act as banker and financial adviser to the Federal Government.” As of November 2011, CBN reports total assets of NGN 12.7 trillion (USD 80.8 billion).
Sources and Additional Resources:
Business Daily: “MFBs Set Out New Strategies to End Loan Default,” http://www.businessdayonline.com/NG/index.php/microfinance/45917-mfbs-set-out-new-strategies-to-end-loan-default-
MicroCapital.org story, October 17, 2012, “MICROCAPITAL BRIEF: Central Bank Governor Sanusi of Nigeria Argues Microfinance Should Empower Families,” https://www.microcapital.org/microcapital-brief-central-bank-governor-sanusi-of-nigeria-argues-microfinance-should-empower-families/
MicroCapital.org story, August 12, 2012, “MICROCAPITAL BRIEF: Microfinance Development Fund of Nigeria Will Seek to Increase Women’s Access to Finanial Services by 15% per Annum,” https://www.microcapital.org/microcapital-brief-microfinance-development-fund-of-nigeria-will-seek-to-increase-womens-access-to-financial-services-by-15-per-annum/
MicroCapital Universe Profile: Central Bank of Nigeria
http://microcapital.org/microfinanceuniverse/tiki-index.php?page=Central+Bank+of+Nigeria+%28CBN%29
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