A member of the World Bank group, the International Finance Corporation, is collaborating with the Central Bank of Nigeria and the Ministry of Industry, Trade and Investment to establish asset collateral registry in the country.
The IFC Country Manager for Nigeria, Mr. Solomon Adegbie-Quaynor, who made the disclosure in Lagos on Monday, said when established, the registry would help to provide solutions to several loan-related challenges confronting the financial system in Nigeria.
“The IFC is working with the CBN and the Ministry of Industry, Trade and Investment to establish collateral registry. We want to see how we can collaterise assets to help in financing,” the country manager said.
Adegbie-Quaynor stated that the registry would ease the process through which banks and other financial institution provided loans to companies, especially the Micro, Small and Medium Enterprises.
According to him, one of the objectives of the IFC is to reduce poverty by assisting banks and other financial institutions to provide finance for the MSMEs.
The World Bank expert noted that the MSMEs had the capacity to boost employment generation and stressed the need for such enterprises to have access to loan facilities.
Adegbie-Quaynor listed the IFC’s strategy in the country as enhancing infrastructure provision, employment creation and poverty reduction, among others.
As a result, he said the IFC was working with the World Bank and the Federal Government to ensure that the recent reforms in the power sector were sustainable.
He said the provision of loans was important to the World Bank member because it could stimulate employment.
He said, “Currently, we have relationship with some microfinance institution in Nigeria. I want to say they are commercially oriented, not profit maximising. We all remember about 800 microfinance banks that were insolvent and the CBN is trying to look at ways in which to correct that.
“We want to make sure that we support groups that want to provide financial services on a sustainable basis to the base of the pyramid, the poor. We are not going to be able to finance the 400 MFBs that remain. We are going to finance market leaders and those who can set the right standard and have other microfinance institutions understand what it means to operate well.
The country manager said the IFC had provided equity financing to five microfinance banks, adding the organisation’s total exposure was close to $25m.
He said, “We do not really look at the size of the funding we provide, rather we look at the catalytic effect. What we are trying to do is to crowd other financiers. Our next focus is to mobilise the local banks in Nigeria who normally look for security or collateral to provide financing.
“We want to look at how we can mobilise them efficiently to finance microfinance banks that do not have such collateral to pledge. We have been focusing on innovations that support microfinance institutions.”
The IFC boss said the World Bank member issued a naira bond in February this year and noted that part of the reason was to raise money in naira and how to lend it to their clients.
Source: Punch (by Oyetunji Abioye)
