The Managing Director, Agosasa Microfinance Bank, Ogun State, Deacon John Bukola Olayinka in this interview with AYOBAMI ADEDINNI speaks on the Bank’s Verification Number, (BVN) directive of the Central Bank of Nigeria, the MFB bill at the National Assembly and sundry issues. Excerpts:
What can you say about the Micro-finance bank sector in Nigeria?
MFB sector in Nigeria is an evolving idea. At the initial stage, we got it wrong. This was when we were just community banks. It was not properly managed because there was watery regulation. When the MFB idea started in 2007, we were advised to convert to MFB from community banks.
Then we had some training with CBN which trained us on how MFB operates but we are not yet there. This is because when you think of economies such as Kenya that are not as big as Nigeria, you will know that they have gone far on the issue of MFB.
I think the main reason is because the government has not really been faithful to its side of the bargain. Initially, when MFB were to come in place, there were certain amount of money earmarked from allocation to the local government, about one per cent which was supposed to be used to assist MFB within that local government because they know that MFB are very close to the grassroots and the active poor.
However, we are yet to hear anything about that. Apart from maybe Kano and Kaduna that I saw erecting about 20 structures for MFB, which is a lot of effort.
Although, some people may say despite that the MFB sector is not even thriving over there unlike here where we don’t get any assistance from the government. If we can have support from the government, at least the capital outlay, erecting structures will not be a burden to us again; we will be able to move forward.
CBN and NDIC have emphasized over and again that director-related loans is killing the MFB sector, more so, with a recent declaration by NDIC of the arrest of some 17 directors, what can you say about that?
The issue of director-related loans is a big problem to MFBs. Although not all MFB are affected, but I will say a great percentage. This is because they are the pioneer directors. They have been in the system all along. The action taken now by NDIC is long belated. They are the ones who employed the MD and pay him salary, so he may not really have such power to make them cough out such money except with the backing of the regulatory body. I think it will serve a good lesson to others.
But thank God , the CBN and NDIC have told these directors that look your MD is responsible for the bank and the only thing you can do is to support him by paying your loans when due and by reducing your influence by the way loans are disbursed.
In my own bank, I have control on the issue but the deed has been done. In most cases, these loans we are talking about were taken during the era of community banks.
On the issue of BVN, CBN gave December deadline, what’s the update?
The issue of BVN was a big one for us. When the issue of BVN came up, we approached the commercial banks to assist us but we discovered that they were going at the back to woo them to their own banks. We therefore approached CBN. CBN initially gave us a high price, to acquire the machine.
So fortunately, the NAMB president was able to take up that matter and was able to secure a complete device for very minimal price. Those people gave him a condition that at least 200 MFB must purchase the device. Before then, CBN gave two devices to each zone for us to use it on rotation.
I have purchased one for my bank. Even by the time we got for ourselves, the national executive still approached the CBN and said what can you do for us? And an amount of money was then released as subsidy for us.BVN is no more an issue for MFB. We have already complied.
What can you say about the collateral registry recently launched by the CBN?
Just like any other law, it may be difficult to implement. For instance, you want to use your phone as collateral. What is the value of the phone? Will you leave that phone in the bank? There are some other things like vehicle which I may ask you to park in my premises. I know the vehicle is in my custody and I will take care of it to ensure that it’s secure.
In other cases, we might give you the custody while we have the documents but even at that we must be on our toes.
The owner can get another paper with which to dispose of the vehicle or may even say he was attacked by armed robbers. This is why MFBs deal with you based on personal integrity. We are not that particular about collateral.
On the recent Anti-money laundering directive to MFBs, how compliant are you?
Since we have started BVN, how many MFBs have been discovered to be keeping illicit funds from politically exposed persons? All the monies discovered in abandoned buildings, If MFBs have access to such funds; there will be a lot of relief for the grassroots.
What’s the update on the MFB Bill?
We were asked to come and make our own presentation, we discovered that some people just went to another country and copied it verbatim. It’s good to have an MFB bill but it must be done the right way. The bill has been stepped down. It’s a good idea but it must be done right because if we don’t do that ab initio, it will cause problems in the future.
Tell us about Agosasa MFB
Agosasa MFB came into being in August, 1996. The pioneer chairman was Alhaji Y.A .B Olatunji, while the pioneer MD was Chief Ekundayo. They started well and they have the confidence of the community. We are the only surviving indigenous MFB in the whole of Ipokia local government.
There were about 5 but along the line, some of them collapsed. The bank has seven board members. The current chairman is Alhaji Falade and myself as the Managing Director. The bank’s focus is to assist the active poor which is why all we do is geared towards helping our people. If you’ll observe, you’d see that at the entrance of the bank, you see so many Okada there. It is what we use to reach out to our people in the nooks and crannies. We give as low as N5,000 to salary earners, artisans among others.
Plans on expansion
With the new polytechnic in Ipokia, we have the intention of having our presence there. We are targeting everybody in the academic community.
What’s your view on 2017 and expectations for 2018?
2017 is not too bad. The beginning of the year was harsh. We believe that by 2018, we will move faster than now. One of the things we are trying to do is partner NIBSS so we can roll out our ATM cards.