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The Microfinance Industry in Nigeria is set to experience a major breakthrough in its operations, as the Microfinance Development Company Ltd (MDCL), plans to launch its Intermember Liquidity Placement Platform (ILPP) during a high-level business forum for key stakeholders in the microfinance industry.
The event, which is being organised by MDCL, will hold on March 31, 2021 at Sheraton Hotel, Lagos, and will play host to Managing Directors of Microfinance Banks and key decision makers in the banking, technology, SME and financial services industries.
Rightly themed, “The 21st Century MFB: Leveraging Technology to Drive Financial Inclusion in the MFB Industry”, the event will focus on liquidity management, risk asset creation and other macroeconomic challenges faced by the microfinance industry, with a view to proffering viable solutions to them.
The Keynote Speaker at the event is Lawrence Amadi, a Technology Advisory Partner at KPMG. He will be joined by other seasoned captains of industry and thought leaders drawn from different business verticals. Some of them include the Chief Executive Officer of MDCL, Obinna Onunkwo; Managing Director of InfoWARE Ltd, Uwa Agbonile; the Chief Executive Officer of Appzone Ltd, Obi Emetarom; the Managing Partner of Bloomfield Law Practice, Doyin Afun; and the Managing Director/CEO of Law Union and Rock, Ademayowa Adeduro.
Speaking about the upcoming event, the Chairman of MDCL and Founder of Hasal Microfinance Bank, Rogers Nwoke stated, “the Microfinance Banks (MFBs) are critical to Nigeria’s financial inclusion goals, particularly because of their role in providing financial services to the underserved segments of the Nigerian economy.
However, the industry witnessed a high failure rate in the past, owing largely to issues of poor corporate governance, weak liquidity position, high cost of funds and the harsh realities of the Nigerian business environment, among other factors. This event has been put together to address one of those critical factors, which is the challenge of liquidity.”
He further noted that the Central Bank of Nigeria (CBN) has deployed measures to strengthen corporate governance and enhance sustainability, going by the revision of minimum capital requirements for microfinance banks. MDCL is complementing the effort of CBN by providing credit facilities, liquidity management and also strengthening compliance with statutory requirements by the beneficiary MFBs.
When asked about the Intermember Liquidity Placement Platform (ILPP) which the company is launching on the day of the event, the Chief Executive Officer of MDCL and Managing Director of PurpleMoney Microfinance Bank, Obinna Onunkwo said, “as a company, we have successfully developed an online trading platform for use by microfinance banks registered in Nigeria, to securely place liquidity among themselves. This is in line with our objective of facilitating funding for microfinance banks to provide affordable loans to MSMEs and the financially excluded population.
“We have also created a Digital Lending platform for Microloans under the Shared Services initiative for the industry, and it will be formally introduced to the public at the event. Our goal is to assist the MFBs address the challenges of short-term liquidity, thereby allowing them to grow in a sustainable manner.”
A very notable figure in the Microfinance Industry and Founder of LAPO Microfinance Bank, Dr Godwin Ehigiamusoe, made a strong argument in favour of the platform.
According to him, “deposit mobilization is very critical to the success of MFBs. Sadly, the industry does not enjoy the same benefit of interbank liquidity trading which commercial banks have access to via the Scripless Securities Settlement System (S4) trading platform, under the auspices of CBN.
“That arrangement allows banks to access trade of overnight and other short-term instruments to meet daily cash obligations. The MFBs need a similar arrangement to meet their cash obligations, but that has been non-existent till this moment. I am happy that MDCL has decided to find a solution to this perennial challenge.”
The event is being organised in partnership with technology giant, InfoWARE Limited, a company that is ultimately committed to empowering the financial ecosystem across Africa with real-time market data and powerful software solutions.
Other partners include Appzone Limited, a renowned pan-African software solutions company; Law Union and Rock Insurance Ltd, the insurance company of choice in Nigeria; Bloomfield Law Practice, a foremost full-service law firm; and Stanbic IBTC Bank.
Incorporated in 2019, Microfinance Development Company Limited (MDCL) is a private-sector led Special Purpose Vehicle (SPV) conceived by the National Association of Microfinance Banks (NAMB) to primarily address the problems of liquidity and capacity in the microfinance industry.
The company sources, manages and disburses funds to MFBs in order to build sustainable institutions that would fulfil their collective social mandate of lending to the active poor and micro/small enterprises. In addition, it also provides capacity-building support to the beneficiary institutions.
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