Banks gives reasons for high interest allegations

The National Association of Microfinance Banks (NAMB has debunked the allegations that the banks charged outrageous interest on loans to Micro Small and Medium Enterprises ( MSMEs).
The Central Bank of Nigeria (CBN) on Dec. 10 said that  the  banks’ charges on loans extended to Micro Small and Medium Enterprises (MSMEs) are outrageous.
“According to the apex body many MSMEs were unable to access the Federal Government’s loans  channelled throughout microfinance banks.
” The loans aimed at stimulating local production and boosting non-oil export.”
But the President of NAMB, Mr Roggers Nwoke, said in Lagos that the
microfinance banks’ charges may be higher but were not outrageous.
He explained that the reason for the high charges was that the CBN failed to disburse planned intervention funds to Microfinance banks
He said: “The National Microfinance Policy provided for the “establishment of a Microfinance Development Fund” to provide liquidity to the Microfinance segment.
“This fund is still not in place since the launch of the policy in 2005,” he said.
He further said the apex body failed to implement the linkage programme as stipulated by the National Microfinance Policy.
“Today commercial banks can collect deposits from the smallest saver but cannot give loans.
“A system where commercial banks can collect savings and not give loans to poor people will continue to aggravate the situation,” he said
He posited that commercial banks must be mandated to lend a percentage of their loans to MFBs for on-lending to micro clients.
Nwoke also mentioned that the impact of inflation, currency devaluation, very high operating cost, multiple taxation is high and outrageous on the bank, thereby limiting their lending capacity.
He urged the apex body to implement the 2005 National Microfinance Policy in full  before the first quarter of 2019 ends