MFBs’ survival requires thinking, environment study post-COVID-19
For microfinance banks (MFBs) to survive post-COVID-19 impact, there is a need for critical thinking and constant scanning of the business environment.
The Director, Special Insured Institution Department, Nigeria Deposit Insurance Corporation (NDIC), Joshua Etopidiok, said this at an online webinar organised by the Association of Enterprise Risk Management Professionals, (AERMP).
Etopidiok in a keynote address on the theme, “Microfinancing in Nigeria Post Covid-19: Managing the risks, embracing the opportunities,” said to boost depositor’s confidence, MFBs need to refocus claims resolution and asset management functions.
He said they also need to advertise the framework for technical and financial assistance, supervise entities to encourage customers to utilize digital financial services.
Besides, he urged licensed MFBs operators to communicate hope to staff and customers, reach out to borrowers having challenges and direct borrowers to access intervention funds, are while scanning the environment and work with start-ups with prospects using digital financial services to increase financial inclusion.
Etopidiok charged operators to ensure cost containment, shore up support for micro trading, financing agriculture and allied activities while ensuring active engagement of Central Bank of Nigeria (CBN) and NDIC.
In her remarks, MD/CEO, EDfin Microfinance Bank, Bunmi Lawson, urged MFBs to plan for Mergers and Acquisition rebound post-COVID-19, by increasing list of potential investors/targets, enhancing equity for the transaction, and undertaking housekeeping to eliminate value leakages like vendor assist/due diligence among others.
Lawson said MFBs should also identify and redesign key journeys that are likely to be affected and result in poor experiences. Furthermore, improve user experience on digital channels while proactively managing customer perception and be seen as community oriented.
She stressed that MFBs need to partner with the CBN to disburse emergency response credit facilities. For existing loans, extend loan payment period for short term credit facilities by three to six months while restructuring terms for longer-term instruments.