Financial inclusion: BoI to set up micro-credit fund

By Nkiruka Nnorom, Vanguard

The Bank of Industry, BoI, has revealed strategic plans to set up a micro-credit fund to address the funding needs of micro-enterprises.

The dedicated micro-credit fund, Bottom of the Pyramid Fund, BOPF, would be available to deserving entrepreneurs at the lower stratum of the economy through Microfinance Banks.

The Managing Director/CEO, BoI, Ms Evelyn Oputu, who revealed this to Vanguard at the sideline of a two-day workshop organised by Ministry of Trade and Investment for journalists, said the move was in furtherance of the Central Bank of Nigeria’s financial inclusion strategy.

Financial inclusion is an initiative by the CBN to ensure that financial services and products are made available to considerable number of adult, who are unbankable to date.

“In continuation of its drive to deliver on its mandate, BoI has identified some gaps in terms of funding, capacity building and mentoring amongst other challenges facing a segment of potential entrepreneurs who are either unserved or under-served vis-a-viz access to finance and other developmental support services.

“The bank, therefore, is desirous of achieving financial inclusion by reaching out to this vulnerable Bottom of the Pyramid (BoP) group with a view to improving the quality of their lives. The approach is to set up a dedicated micro-credit fund for on-lent through microfinance banks,” Oputu stated.

She added, “It is estimated that 70 percent of the Nigerian population regarded as the rural poor are at the Bottom of the Pyramid and they are largely engaged in subsistence farming and sedentary activities. It is this group at the BOP that the BoI intends to serve in a new funding scheme in order to convert opportunities and potentials into realities.”

She explained that tackling the funding need of those people at the lower end of the pyramid would reinforce BoI’s in the economic stratum.

Consequently, she said that the Bank of Industry would be partnering with the Small and Medium Enterprises Development Agency, SMEDAN, the Association of Local Governments of Nigeria, ALGON, Organised Private Sector, OPS, and the Federal institute of Industrial Research, FIIRO, among others to achieve the objective.

“Achieving financial inclusion at the BOP requires revolutionary changes through a well structured eco-system consisting of development agencies such as BoI, large corporations, SMEs, Civil Society Organisation/NGOs.

The collective activities of the eco-system will lead to co-creation of ideas and innovation which reduces investment needs and risks as more share in the investment as collaborators in a participatory process,” she affirmed.

Referring to the reason for paucity of fund to small and medium scale enterprises, the BoI boss stated that poor attitude of promoters of such businesses to loan repayment and poor understanding of dynamics of SMEs by financial institution, resulting in their perception of the sector as high risk.

She identified other hindrances to include inadequate capacity building on the part of SMEs in the area of skill acquisition and entrepreneurship.

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