Date: 2018-11-03

The Micro Finance Bank sub sector of Kwara State economy has over the years recorded about 40 per cent of loan default.

The Managing Director of Citizens Trust Microfinance Bank, Ganiyu Adebayo Mustapha disclosed this on Monday  at a seminar organised by the National Association of Micro Finance Banks, Kwara Chapter, held in Ilorin.

According to him, "Everywhere in the world, before you administer credit, you must envisage default, as lending is the heart of every bank.

He stated that most creditors do not have means of repayment while some who have the wherewithal lacks integrity, hence the problem of loan default.

"The activities of Micro Finance Banks in Kwara State have evolved over the years and to a large extent improved the economy of the state.

"MFBs in Kwara State have also supported the vision of the state government in the channeling of micro credits funds through the sub sector to citizens of the state.

"Microfinance banks in Kwara State are performing relatively well despite the economic hardship," he added.

Mustapha noted that the sub sector has employed, adding that many MFBs are springing up because the market is viable.

"It further shows that financial inclusion in Kwara State is evolving and Micro Finance Banks have bridged the gap between the main sector and sub-sector of the economy," he further said.

He noted that over regulation from the Central Bank of Nigeria (CBN) as well as overtaxing from the state government poses threat to the growth and sustenance of MFBs in the state.

"We want  to appeal to the state government to call on CBN to shelve the new policy of recapitalisation of MFBs in the country.

"This is not the best time to come with such policy given the economic scenario of the country. Even, the confidence of investors to invest in the sub sector is very low. These are  parts of the challenges of MFBs."