The Central Bank of Nigeria has disclosed that microfinance banks’ loan granted to Micro Small and Medium Enterprises across the country dropped from N233.7 billion as at the end of June 2017 to N183 billion by the end of December 2017.
The figures, however, revealed that the loans declined by N48.7bn, which is about 20.96 per cent. According to the report of the apex bank, total assets of MFBs decreased to N341.68bn at the end of December 2016 from N455.96bn as of the end of June 2016, reflecting a decrease of 25.06 per cent.
In the same vein, the report said shareholders’ funds for the microfinance banking sector decreased by 42.91 per cent from N135.09bn to N77.12bn as of the end of December 2016.
The decrease in shareholders’ funds was largely attributed to losses recorded by the microfinance banks resulting from increase in non-performing loans.
The report further stated that total deposit liabilities dropped from N191.25bn as of June 2016 to N166.29bn as of December 31, 2016.
“The shareholders’ funds also dropped by 42.91 per cent from N135.09bn to N77.12bn as of December 31, 2016. The decrease in shareholders’ funds was largely attributed to losses by the microfinance banks resulting from increased provisioning for non- performing loans.”
It added, “Reserves also decreased by 24.39 per cent to N16.80bn at endDecember 2016, from N22.22bn at end-June 2016. The decrease in reserves was as a result of operational losses.”
However, the shareholders of the MFBs are bitter and are ready to do legal battle.
One of them, Mr. Gbenga Osho, blamed the management of the banks for what he described as lack of corporate governance in the subsector.
He said, “They have failed to learn from the experiences of their predecessors. Most of the MFBs that operated around 2009 also closed operations because the management gave loans to people without following due process and it is unfortunate that the same thing is repeating itself in 2017.
“As far as we (shareholders) are concerned, we won’t allow this to go without justice. The CBN should also share from the blame, too, because it has failed to regulate the operations of the banks. If nothing is done in three months, we are set to go to court.”
