Why More Nigerian Microfinance Banks May Collapse
Friday, January 30, 2015
The Managing Director of Asha Microfinance Bank, in Nigeria’s western city of Lagos, Mr Aminul Bhuiya, on Thursday raised fears about the possible collapse of more microfinance banks in the country saying this was due to high cost of operation.
His complaint tallies with earlier complaints by stakeholders in the sector.
The News Agency of Nigeria, NAN, quoted Bhuiya as saying that over 860 out of over 890 microfinance banks in the country were struggling to survive because they were competing with commercial banks.
He said most of them collapsed because they operated on a mini commercial bank model, adding that no microfinance bank would succeed under such model.
According to the expert, microfinance banks need not to rent a gigantic or exotic building to offer their services.
“Some of us operators even amass vehicles, this is not supposed to be so,” he said.
According to Bhuiya, the Central Bank of Nigeria, CBN, has designed a model and rules for microfinance banks in Nigeria but most operators have deviated from the rules.