Business Hilights
Tracking Nigeria's Headline Business News Online

Microfinance banks critical to family survival in recession—–Nwabunka

Chief Executive Officer of a non-governmental organization (NGO), Grooming Centre, Dr. Godwin Nwabunka, has said microfinance banks are critical in the survival of families during economic recession.

In a press conference in Lagos highlight activities to mark its 10 years anniversary of the body, Nwabunka said this can be achieved through their inclusion-driven financial services and loans to small business holders. He explained that the centre had given out N4.5 million loans since its inception, operating on a model of simple transparency of operation and creating opportunities for females.

According to him, “Microfinance institutions and banks become the most active parts during recession. You have to ensure that households survive. There has to be food on the table, children have to go schools, and need access to health, and sanitation. They don’t understand recession. The micro enterprises at the bottom level of the pyramid need to ensure there is food on the table. By empowering those women, Microfinance sector becomes a safety net for ensuring the system doesn’t fail

“At Grooming Centre, we are promoting a simple model of financial inclusion that is based on simplicity of approaches and transparency of operation. In terms of numbers, we have done over 4.5 million loans in 10 years. At the moment, World Bank is working on universal access that is aimed at providing about 20 billion people with loans. In Nigeria, Grooming Centre has been identified as partner in the signing-off taking place November in Washington DC.”

He added that the company started with giving out 15,000 naira loan but has now been raised to between 60,000 and 150,000 naira saying that non-financial benefits in the value being derived from loans.

“But for us the issue is not the volume of money you put out, but the impact it made. How much has it changed the lives of the people? Apart from the financial benefits, what other non-financial benefits are you getting at household levels? How is it impacting on your family cohesion health of you children? Those are the things we want to find out beyond financial benefits.

According to him, microfinance has been able to record monumental achievements including support and recognitions from global institutions, low portfolio risk and over 400 branches across Nigeria because of its global best practices.