Source: BusinessDay Online, Oluyinka Alawode
Article available here.
Another microfinance bank with the passion to boost the economic emancipation of the nation especially at the grassroots level has come on board. Seedvest Microfinance Bank Limited commissioned weekend in Ibadan, Oyo State had in attendance representatives of the deputy governor, financial sector surveillance of the Central Bank of Nigeria (CBN), Tunde Lemo and other financial institutions department, trade unions and associations.
Bode Ajayi, the managing director/chief executive officer of Seedvest Microfinance Bank Limited said the idea of a microfinance bank crept to the fore in the furnace of Seedvest Group about a year ago. He revealed that fingers were kept working as to name, location, strategy, vision, mission etc. The promoters of the Seedvest Microfinance Bank Limited which includes Kehinde Oyeleke, the Group Managing Director, finally chose Ibadan as its location.
Ajayi pointed out that policy makers, politicians and economists have always recognised the fact that there cannot be any sustainanable development without the development of the rural economy and that an underdeveloped rural sector is indeed an obstacle to national economic emancipation. To this effect, he said, “The government has for a long time been investing efforts and time in trying to find an appropriate institution that would be relevant and capable of solving people’s microfinance credit and savings problems at the grassroots level”.
He noted the failed attempts made by the government to force the conventional banks to open a stipulated number of rural branches before an urban branch could be approved and opened. He also recognised government efforts in setting up Development Banks with emphasis on particular sectors of the economy, Nigerian Agricultural and Co-operative Bank (NACB), Nigerian Bank for Commerce and Industry (NBCI), Federal Mortgage Bank (FMB).
He said it was due to the failure of the above institutions that the government called for the review of the entire financial system for a proper diagnosis of the root of the failures being recorded in the previous approaches. This, he said led to the establishment of the grassroots oriented form of banking such as People’s Bank of Nigeria and the Community Banks.
Why Microfinance Banking
Ajayi said since the emancipation of the grassroots economy was an important task, the government had to put the failures of the past behind. He added that the new approach now called Microfinance Banking is entirely private sector driven with the government involvement limited to the regulatory framework and surveillance. He pointed out that microfinance banking has worked and is still working excellently in the countries of the Asian bloc, Latin America, Europe and North America including some parts of Africa. He stated that, “The operations of microfinance banking largely advance the course of ‘The Millennium Development Goal Initiative’ of the United Nations.”
Ajayi said it was regrettable that only 35 percent of the economically active population in Nigeria had access to financial services, the remaining 65 percent were excluded or at best often served by the informal formations like money lenders, “Esusu, friends and credit unions.
He also said, “In Nigeria, average banking density in rural areas is one branch of a bank to 57,000 people. Given the existence of this huge un-served market at the grassroots, the need for economic empowerment of the poor, employment generation and poverty eradication, savings mobilisation at the grassroots, coupled with the unutilised Small and Medium Enterprises Equity Investment Scheme (SMEEIS) fund, the embrace of Microfinance Banking in Nigeria cannot be better timed.”
He noted that a wide gap still exists in terms of the financial services provided for the Nigerian populace especially to the low income group and micro entrepreneurs, adding that, “This is the gap we have to fill”. According to Ajayi the people behind the establishment of Seedvest Microfinance Bank Limited have a passionate belief in its efficacy to transform lives and make life worth living while posting profit in the process. He said, “If the low income earners and the micro-entrepreneurs have access to financial services support they will record tremendous success in their trade or vocation.”
Vision
The bank’s vision as revealed by the promoters was to be named as one of the 500 microfinance banks in the world within the next ten years Ajayi said the bank’s passion was its strength and its mission was to become the preferred bank within its coverage area and be among the 500 microfinance banks in the world and is fully prepared, having put together a workforce with core competence in clients handling and depth of knowledge in micro banking services to meet the needs of the market.
Products
The Seedvest products include Mustard Seed Savings Account (MUSSA), Seed Investment Savings Account (SISA), Dynamic Savings Account (DSA), Individual Current Account, Corporate Current Account and Fixed Deposit Account. Others include loans and advances, Traders’ Relief Scheme (TRS), Transport Support Scheme (TSS), Vocation Support Scheme (VSS), Farmers Support Scheme (FSS), Shares Purchase Scheme (SPS), personal loans, equipment purchase loans. The mustard seed account can be opened with as low as N200 with the same amount saved everyday and the depositor may apply for a loan of 200 percent. Some of the other accounts can be opened with N500, N500, N2000, N5,000 or more.
Target clients
According to the promoters of the bank, this opportunity is opened to all, particularly organised groups such as spare parts sellers, union of road transport workers, road transport employers association, other associations such as building materials sellers, nylon cutters and sealers, master bakers, tailors and seamstresses, grinders, electricians, welders and panel beaters, auto mechanics, rewire and battery chargers, carpenters and furniture makers, hairdressers and barbers, patent medicine sellers, cobbler and shoemakers, commercial motorcycle riders, weave-on seller, home video sellers, businessmen and women, people in gainful employment etc. the bank also intend to develop a package for area boys to become economically empowered.
Bank policy
The bank executives stated that customers were treated as partners in progress, so that those who took loans could grow, germinate and bear seeds. The chief executive officer said mechanics most often worked on any available land and were forced to relocate when the owners of the land took over. He said if such mechanics association were customers of the bank, they could call on the bank for help and the bank would purchase the land if available for sale or any suitable land so their customers would not have to keep relocating.
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