The Microfinance Banks (MFB) have recorded impressive performance in all key assessment parameters, with the total deposits surging by 168% to N1.25 trillion at the end of the second quarter of 2024.
In this connection, Mr. Joshua Ukute, the National President of the National Association of Microfinance Banks (NAMB), said it was disclosed in Abuja on Monday.
He said the subsector’s total assets rose to N2.795 trillion in June, representing an increase of 91 per cent compared to the previous year.
Ukute disclosed these performance highlights of the subsector at the NAMB 2024 Annual General Meeting in Abuja.
He disclosed that as at June 30, efficiency rates in the sub-sector had improved 13.09 percent to 12.25 percent and the Liquidity Ratio was at 65.46 percent due to improved lending
He said healthy financial and operational performance of the operating MFBs in the period was due to the Visibility and Impact Capacity Building and Self-Regulation (VICS) project.
He said the VICS project was initiated by the executive council of the association on assumption of office two years ago.
” The last 12 months have been exciting as the MFB subsector almost doubled in size.
“Reports from the Central Bank of Nigeria (CBN) as at June 30 states that the Total Assets of the Sub-sector increased by 91 per cent to N2.795 trillion.
“Total Deposits rose by 168 per cent to N1.25 trillion, and Total Loans by 34 per cent to N1.382 trillion. “Efficiency in the sub-sector improved as PAR improved by 13.09 per cent to 12.25 per cent and the Liquidity Ratio was 65.46 per cent due to increased lending,” Ukute said.
We were very keen that the activities of MfBs, through our various partners, deliver just the desired effects on all stakeholders,” he said.
“Our relations with such agencies as NFIU, FIRS, BOI, and DBN have only deepened the collaboration and relations with our members”, he said.
He claimed the secretariat had initiated and coordinated these flagship programs having a positive impact on member banks over the issues related to compliance, skills enhancement, and relationship with regulators.
While he said all the same the performance could be said to be fair, the sub-sector still faces a few challenges, key among them being the increase in operating costs occasioned by high energy costs, lack of skilled personnel, and inflation.
These, in his own words, kept putting pressure on the businesses of the members.
He added that CBN’s compliance regime and the revocation of Heritage bank’s licence was transmitting adverse effects on MfBs with trapped funds in the liquidated bank.