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LCCI harps on access to finance as ETMB begins operations

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THE importance of access to finance in the development of small businesses and the role of microfinance banks in facilitating micro credits have again been underscored by the Lagos Chamber of Commerce and Industry (LCCI) and the newly licenced Empire Trust Microfinance Bank (ETMB).

 LCCI President, Alhaji Remi Bello, who was also the Guest of Honour at the grand opening of the microfinance bank in Lagos, at the weekend, said the chamber is happy with the promoters of the financial institution and will identify with any effort directed at boosting the activities of small businesses especially in the area of finance and credit.

 “Lack of access to credit by small and micro enterprises businesses has been identified as a major reason for the growing level of poverty in many developing countries. This further underscores the crucial role of microfinance institutions in the economic growth and development process, especially in their service to small businesses,” he siad. 

 But the Managing Director of Empire Trust Microfinance Bank, Seun Durojaye, said the emergence of the financial institution was a product of eight years study of the sub-sector, having been involved in other forms of businesses revolving around micro and small enterprises and financing.

 “In our target areas, we know many of the people are bank shy, but with our model and mass marketing strategy, we would rave up the market and provide access to finance our customers with ease.

 “We are in partnership with Stanbic IBTC Bank for now, in the area of correspondent banking. The agreement is that every customer of our bank can withdraw money from their account and as well put money in their account in any of the 300 branches of the bank.

 “All our customers are immediately included in the MasterCard, such that wherever they are in Nigeria and outside the country, they can have access to their account, without the protocol of coming to the head office or branch for transactions.

 “This is important because people believe that once you put your money in microfinance bank, you should forget about it since they have only one or two branches where you can make transactions and that does not apply to us, especially for those who go to other states to conduct their business and may not want to carry their cash around,” he said.

 He pointed out that now that the economy is tough, its model will surely become a toast in their target market, as commercial banks are currently facing the international headwinds and major monetary policy issues, which have limited their interests in small businesses.

 According to him, in the next five years, the bank would become a national financial institution, starting with a target of national licence in the three years from now and spreading the branch network to the six geopolitical zones, adding that its product offering on hand is capable of helping it achieve the goal.

 In the area of interest rate, Durojaye said the bank would offer competitive rates both to lending and deposits, but noted that to some extent, the challenge in the development of small businesses is not basically lending rates, rather access to finance, especially for viable ideas that are left unsupported.

 However, he admitted that the bank would not embark on lending without proper monitoring and support for the business to thrive and make returns that are capable of meeting the loan obligations.

Noting that many of the loans in the sub-sector fail because of diversions, he said that effective risk management strategy has been put in place, which would monitor accounts to flag any trace of non-performance earlier, together with a functional recovery unit as well.

 


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