President Goodluck Jonathan has said that the Federal Government will back the Central Bank of Nigeria (CBN) to ensure that a Microfinance Development Fund is established in the country.
The President disclosed this while speaking in Abuja at the opening of the 5th Annual Microfinance Conference and Entrepreneurial Award themed, 'Financial Inclusion for Accelerated Micro, Small and Medium Enterprises Development: the Nigerian Perspective'. Read more
Lift Above Poverty, Microfinance Bank Ltd has adopted and embedded the six principles of client protection into her core business operations.
Godwin Ehigiamusoe, Managing Director, said the six principles are part of the microfinance-industry initiative to ensure that low-income clients of microfinance are adequately protected against exploitation and un-ethical practices.
The six principles are Avoidance of Over-Indebtedness, Transparent and Responsible Pricing, Appropriate Collections Practices, Ethical Staff Behaviour, Mechanisms for Redress of Grievances and Privacy of Client Data.
He noted that LAPO has taken steps to realize the objectives of these principles. These steps according to him include the strengthening of LAPO’s Client Relationship Unit, substantial reduction in interest rates and charges and relevant training for credit staff.
After years of growth LAPO has entered a phase of consolidation in 2009. This consisted of series of actions towards transformation into a regulated nation-wide microfinance institution and strengthening of our service delivery structures and systems. This had become necessary in order to address emerging issues and concerns in the international microfinance community and at the same time take advantage of current developments in the Nigerian microfinance market. Expectedly there have been obvious challenges but your support and understanding have been helpful in addressing them.
LAPO with its strong service delivery structures and systems; responsive products and services and expertise in micro-lending remains outstanding and acknowledged in the local microfinance market
Periodically, we shall use this e-newsletter to update our partners on significant developments in LAPO.
Central Bank of Nigeria Approves LAPO Microfinance Bank
The Central Bank of Nigeria has given approval to the application of LAPO Microfinance Bank Limited. With this LAPO comes under the regulation of the bank. The approval marks a significant development in the life of our institution and in addressing the issue of savings mobilization. With the approval by CBN, LAPO Microfinance bank now has a new board of 7 members and the CEO. Two of the seven seats are reserved for future investors and partners. Dr. Philip Osarenren Emokpae (economist; monetary policy, management and marketing) the former chairman of LAPO now chairs the new board.
New CFO JOINS LAPO
A new Chief Financial Officer has joined LAPO. He is Dr. Kamakhya Narain Singh. Dr. Singh holds an MBA (finance and strategy) and a PhD (Strategic management of MFIs and their role in sustainable development) from Oxford University UK and the Banaras Hindu University, India, respectively. He is a member of the Indian Institute of Chartered Financial Analysts (CFA) and the Indian Institute of Banking and Finance. Prior to this appointment, Dr. Singh was a microfinance specialist with the Asian Development Bank, and has more than 15 years of professional experience in the MF and SME sector in Europe, Asia and Africa. He resumed on May 3.
International Auditing Firm Preparing 2009 figures
After intensive discussion with our short list of international auditing firms based in Lagos on contents and fees we have now signed an agreement with Deloitte. Their auditors are starting with immediate effect to prepare the 2009 auditing report. It is expected to have the approved and authorized report by August/ September ready to be forwarded to our partners.
German Bank Manager as Volunteer
A German banker Barbara Hagelschuer from the “Sparkassen Gruppe” (largest banking organization in Germany) will be in LAPO in the next four months. She will be involved in internal operational and financial system strengthening components of the transformation process.
Consultant to support the Change Process
LAPO is closely working with a management coach and consultant Bernhard Vester. He is involved in consulting on change management, strategy and organizational development.
Strategic Functions Are Now Operating From Lagos
An annex of LAPO’s Head Office has been established in Lagos. Strategic functions such as finance, credit relationship management are carried out in the Lagos office. The office in the Lagos a commercial nerve center of West Africa will facilitate interface with our partners, regulators and other collaborators. The office is located at 65, Kudirat Abiola Way, Oregun, Ikeja.
Interest Rates And Charges Reviewed
In addition to the reduction in interest rate in October 2009, LAPO has again reviewed its charges. Registration fee and loan application fee of N500 and N200 respectively have been removed. There is training and loan processing fee of 1%. Insurance cover will now be provided at a premium of .6%. These changes take effect in June 2010. It is expected that as a regulated microfinance bank with easy access to public savings, LAPO will be able to offer lower rates on its facilities in the near future.
Volume of Operations is in the Increase
Monthly disbursement rose from N500 million in January to N1.5billion in April. January to April disbursement is N5.2 billion. This represent 30% increase over the figure of N4 billion for the same period of 2009. The N21billion for the year is realizable.
INSURANCE COVER FOR LAPO CLIENTS
LAPO has launched an insurance scheme for her clients. This is in collaboration with GoldLink Insurance a major insurance company in Nigeria. Cover provided includes life, fire in market place and medical (hospitalization only). The premium rate is .6% of loan amount.
Improvements in our Data Processing
The migration of our existing software M2 to the more robust software FOCUS by the Fern company in North Ireland was successfully activated. This will not only lead to more reliable data but will also help reduce workload on branch level.
Nigeria's microfinance sector has failed to make the expected impact on the economy due to misconception by the operators, but this will soon change.
Lamido Sanusi, the Central Bank governor, said the bank will come up with a reviewed policy framework in order to make it more effective.
Akintunde Sowunmi, deputy director, development finance, who represented Mr. Sanusi at a conference organised by Credit Awareness yesterday in Lagos said less than three percent of the rural population of Nigeria have access to microfinance services.
Mr. Sowunmi said one of the challenges is to create awareness about credit acquisition in order to make more people interested in accessing it.
"Despite the importance and benefits of credit, there are socio-economic barriers inhibiting access to financial services such as education, gender, age, irregular income, poor infrastructure, and even geographical location," he said. Read more
ABUJA, June 24, (THEWILL) - The FCT Administration has concluded plans to create microfinance institutions in all the six Area Councils of the Federal Capital Territory, Abuja. The FCT Minister, Senator Bala Abdulkadir Mohammed stated this on Thursday at the occasion of the official passing-out of Batch ‘B’ 2009 members of the National Youth Service Corps (NYSC) at the Old Parade Ground, Area 10, Garki I District, Abuja. Read more
