Microfinance bank secures N2 billion facility from IFC
International Finance Corporation (IFC), a member of the World Bank Group, has signed an agreement to work with LAPO Microfinance Bank Limited to roll out agent banking and boost access to financial services for low-income customers, small-scale entrepreneurs and rural communities.
The corporation also provided a N2 billion (about $10 million) loan to support LAPO MfB’s lending to micro-entrepreneurs. This is the largest investment IFC has made in a microfinance institution in Sub-Saharan Africa.
As the first local microfinance organisation to successfully transform into a fully regulated national microfinance bank, LAPO MfB is a pioneer in the Nigerian microfinance sector. It has grown its client base from 700,000 in 2012 to more than 2 million, across 28 of Nigeria’s 36 states.
The company aims to increase its client base to up to five million by 2017.
In 2012, IFC provided an N800 million facility to LAPO which has contributed to the expansion of its lending activities.
The Managing Director and Chief Executive Officer of LAPO MfB,
Godwin Ehigiamusoe explained that the bank has remained committed to its goal of economic empowerment through access to finance.
“We are taking further steps to increase our reach to more low income earners and more SMEs. IFC’s long term support has helped us and we hope this new project will lead to enhanced financial access for more financially excluded Nigerians,” he said.
IFC’s Country Manager for Nigeria, Eme Essien Lore noted that one of IFC’s core objectives is to promote access to finance that benefits the small-scale business sector as an engine of inclusive growth and job generator.
“Our relationship with LAPO MfB will help us reach out to the critically under served low income earning population of Nigeria, to improve financial inclusion and help grow the economy.”
Lore urged deposit money banks to see microfinance banks as asset class they can invest in. Lore also expressed dismay that Nigerian banks and other institutions are not lending to microfinance banks which have a lot of benefits.
“If you look at the microfinance banks that are borrowing today are borrowing from CBN, the others are international lenders. There are institutions like IFC who are seeing the institutions like LAPO and investing in them, what about Nigerian institutions seeing the value of LAPO in Nigeria. There is a real opportunity to bring other people to the table”, she added.
Lore lauded the various intervention funds from the Central Bank of Nigeria (CBN) but, however, added that they are not enough to meet the needs of microfinance banks and agricultural sector in Nigeria.
“The various actors in this market who want to support entities like LAPO really have a lot of space to manoeuvre. We hope to see more support for high performing institutions like LAPO”, she said.
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