GROUP TWO SUPPORT TO MICRO FINANCE INSTITUTION (MFI)

1. GROUP TWOSUPPORT TO MICRO FINANCE INSTITUTION (MFI)

2. ISSUE ONE: Institution Building Among MFBs

3. Facilitators: 1. Mrs. A.U. Ufaruna M&E Specialist (RUFIN CPMU) (Lead Facilitator) 2. Mr. Adedeji Y. Adesemoye, Asst. Director OFRD (CBN) 3. Dr. M.N. Kolo, Programm Manager NACRDB 4. Mr. Femi Olaleye, RUFIN CPMU • Rapporteurs • Lizzy Igbine (Mrs.) Niwfa • Christ John Mamuda (JP) • Ernest Awakessien • Group Membership - 32

4. 1. The MFBs in Nigeria require further capacity building to deliver on their services and reach more clients (revitalization). 2. Criteria for MFB participation: • Must be registered with CBN. • Must be rural based. • There must be evidence of outreach to the rural poor. • Must be RUFIN project states. • Must show commitment to participate in RUFIN • Must be a viable MFB (outstanding performance that represent best practice. 3. The group agreed that to mitigate the uneven distribution of MFBs, the following should be done. • A. Non bank financial institutions and cooperative should be encouraged to spring up in those areas where MFBs are none existent. • B. MFB should partner with MFI/cooperative to create presence in those areas. • C. CBN should evolve friendly policies and an enable environment for more MFB to spring up.

5. 4. The Technical Support for MFB in three major areas:- • A. Technical - Capacity Building & Training • B. Structural - Equipments & Logistics • C. Financial - Linkage to refinance windows • Recommended Training Areas: • 1. Corporate governance. • 2. Investment/Treasury Operations • 3. Deposit Mobilization • 4. Marketing System. • 5. Accounting System. • 6. Client Relationship Management. • 7. Product Development. • 8. Cash Flow Analysis Technique • 9. Credit Management. • 5. The role of Stakeholders • A. MFBs • Develop relevant products. • Beneficiaries • Patronage • Service Providers • Relevant trainings

6. 6.The proposed amendment for RUFIN • A. RUFIN should promote financial literacy for the rural populace. • RUFIN should promote support for consumer protection and Micro-finance Banks service. • RUFIN should promote a partnership model between MFB and cooperatives, groups and unions in rural areas. 7. The Expected result • MFBs would have been capacitated to go into rural areas to deliver financial services to more clients. • Access to financial services (savings/credit) would have been enhanced in rural areas. • Food Security would have been increased. • Increase to means of livelihood and wealth creation in rural areas. • Increase client outreach would have been achieved by MFBs.

7. ISSUE TWO: Capacity Building among Non Bank MFI • Non bank MFI are NGOs, traditional money lenders, cooperatives, credit unions, & self help groups, that are involved in the services of savings mobilization and lending in rural areas. 2. Things that should qualify organizations to be RMFIs are: • 1. Legally registered under the appropriate law. • 2. Must be in the services of savings, borrowing and lending money in micro form to its rural clients and members. • 3. May be membership base. • 4. Must be rural base. • 5. May be NGO type

8. 3. The capacity building critical to RMFI: • 1. Leadership/corporate governance training. • 2. Savings mobilization. • 3. Product development. • 4. Record/Book keeping for RMFI. • 5. Membership mobilization for RMFI. • Proposal writing. • Partnership development process and linkages framework etc. 4. The Technical Support for RMFI • Sensitization/awareness campaign for RMFI on their critical roles. • Advocacy for support for RMFI. • Operating manuals/standards. • Provision of information on Training available from development partners.

9. 5. The Roles of Stakeholders In the implementation of this activity: • Identified Stakeholders are RUFIN, MFI, MFB, NGOs. • The stakeholders should serve as link with rural populace, farmers/women groups. • The MFB & MFI should have relevant products for their clients. • Beneficiaries should increase patronage (savings/loan). 6. Proposed amendment for RUFIN • Develop manuals (Templates) on operations for RMFIs. • RUFIN should commission a study on the activities of RMFI to understand their challenges/constraints and develop appropriate intervention areas. • Develop a model for them to key in. 7. Expected Results: • 1. Building sustainable institutions providing sustainable services. • 2. Building micro entrepreneurs with access to finance. • 3. Increased income/asset and wealth creation for the rural populace. • 4. Achievement of the MDG goal of eradicating extreme poverty. • 5. Fostering gender equality and empowerment of disadvantage groups. • 6. Improve standard of living. • 7. Rural transformation.

10. ISSUE THREE: SUPPORT FOR NACRDB • The current areas of operations are: • Provision of affordable credit to the less privileged. • Acceptance of savings deposit. • Encouraging the formation of Cooperative societies. • Inculcation of banking habits at the grassroots. • Areas where support is necessary for NACRDB are: • Training for desk officers on RUFIN project. • Infrastructural i.e. computers. • Logistics and project vehicles. • Increased funding for the bank by paying up equity for improved outreach. • NACRB should do more micro-lending. • 3. The Type of Support that are relevant: • Infrastructural - equipments • Logistics - vehicles • Training - for staff • Expected Results • 1. Effective & efficient service delivery to the target beneficiaries. • 2. Positive impact on the target beneficiaries. • 3. 70 – 85% repayment target will be achieved. • 4. Increased beneficiaries standard of living. • 5. There will be improvement on the income of the target beneficiaries. • 6. Increase client outreach.

11. ISSUE FOUR: IMPLEMENTATION, SUPPORT, REGULATION AND SUPERVISION FOR MFBs • ISSUES FOR DISCUSSION • 1. The supervision for MFBs should be under the CBN, more CBN branches be strengthen to carry this function. • 2. The current CBN regulatory model should be re-strengthened to ensure efficiency and effectiveness of MFBs. • 3. To sanitize the widespread of distress of MFBs, it is herby resolved that: • A. Policies should be evolved to ensure good corporate governance in all the licensed MFB. • B. The CBN should ensure enforcement of the prudential requirement guidelines to protect depositor’s fund. RUFIN/CBN should facilitate continuous capacity building and development in the subsector. • C. The board/management of MFBs should be suitably qualified, experienced and certified micro finance practitioners.

12. 4. The Technical Support required to achieve the goals of this sub-component • Trainings • Corporate Governance • Credit Process • Banking/Treasury Operations. • Investment/Finance. • Savings and deposit mobilization. • Risk Management • ICT/MIS Platforms. • Accounting System/Records • Internal Audit/Control 5. The roles of stakeholders in the implementation of this activity: 1. Formation of a National Micro finance policy consultative forum. 2. Provision of private sector driven credit Bureau to mitigate credit risk of MFBs. 3. Establishment of a MFB umbrella association.

13. 6. Proposed amendment to RUFIIN • Advocacy on financial literacy and consumer protection. • Promotion of good corporate governance by MFB/MFI. • Promotion of collaboration between MFBs with development partners to leverage on existing knowledge/support. • Expected Result • 1. Access to sustainable financial services to rural/vulnerable populace. • 2. Achievement of MDGs goals and eradication of extreme poverty. • 3. Enhance households to improve their nutrition, children education, health and general living standards. • 4. Mainstreaming the informal sector of the economy into the national financial system. • 5. Contribution to rural transformation.