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Financial Standard, December 21, 2009
AMfB Tasks Government on Infrastructure Development

ACCION Microfinance Bank Limited (AMfB) has urged government to provide infrastructure that is capable of strategically repositioning the Small and Medium Enterprises(SMEs) as the engine for employment generation in the country.

Bunmi Lawson , Managing Director/Chief Executive Officer of the bank said this recently in Lagos at the bank’s annual customers’ forum organized to reward deserving customers for their outstanding relationship and performance with the bank.

According to her, one of the ways of reducing cost of doing businesses in the country is to have a viable infrastructure adding that when this is available microfinance banks’ customers will enjoy higher income while operators would operate at a cheaper rate and services would be a lot cheaper.

She stated that she is not entirely in support of government funding of MfBs because, according to her, many operators and even the poor may consider such funds as their own share of the national cake.

Bunmi also said that one of the reasons AMfB has remained a leading MfB in the country is because of its reliable partners and strong management team, noting that the bank has equally carefully tailored its products and services to meet its customers’ needs.

Vanguard , December 9, 2009
FG tasked on Providing Enabling Environment for MfBs

The Federal Govern ment has been urged to provide an enabling environment to enable microfinance banks, MfBs, provide cheaper services to their customers. Speaking at its customers’ forum last week, the Managing Director, ACCION Microfinance Bank, Mrs. Bunmi Lawson, said if the government can provide adequate infrastructure for MfBs to operate, the cost of doing business would be low, making it possible for them to provide cheaper services. “Government can help MfBs by creating an enabling environment, especially in term of adequate infrastructure as this will make the cost of doing business lower. This will make our customers to benefit from higher income while the MFBs can operate at a cheaper rate by providing cheaper services.”

Explaining why past government initiatives at helping MfBs failed, Lawson said that government’s involvement by giving money spoils the market. “When government becomes involved and gives MfBs money, it spoils the market because most people think that the money is free while others will see it as part of the national cake, making them reluctant to repay loans taken from MfBs.

“That is why past government initiatives in those areas failed. What government needs to do is to make sure that the policy regulation, supervision and enabling environment are created so that MfBs and SME banking will thrive.”

Speaking on the essence of the customers’ forum, Lawson said the customers ought to be celebrated because we feel that we have achieved our vision of making the future bright through our customers.

“This is because we have specifically tailored our products to their requirements, which have made it easy for them to repay loans. Unlike other banks that you have to go through long application processes and huge collaterals, we have simplified ours by doing the work.

“We evaluate them to make sure that they can repay certain amounts of loans so as to make sure that they are not over-indebted. By so doing, this will enable them use the loans to earn more income and still be able to repay such loans.”

She pointed out that the invited customers are among the best customers who are using ACCION’s financial services to grow their businesses and are faithful in repaying the loans.

Commenting on the failure of some MfBs, ACCION’s MD blamed the failure on liquidity issues as most commercial banks are no longer lending to other financial institutions.

“Most MfBs are having liquidity issues and, unfortunately, Nigerian commercial banks are not used to lending to other financial institutions because the way you will structure your loans and collateral requirements is different from when you are lending to a corporate business that is probably in manufacturing. So, because we don’t have access to liquidity, if depositors start withdrawing their savings, you can’t go and start collecting your loans, making liquidity the main issue most MfBs are facing.

Highpoints of the forum was the awards given to some of the customers. Best overall customer and best repeat loan customer went to Miss Saidat Aduni. Best referral customer went to Mrs. Nnenna Elizabeth. Mr. Olu Isaac went home with the best non-defaulting customer while Mr. Dauda Marcus won the best savings customer.

ACCION Names Michael Schlein as New President and CEO

BOSTON, Mass., September 10, 2009 – ACCION International, a pioneer and global leader in microfinance, today announced that it has named Michael Schlein as its new President and CEO. Schlein, President of International Franchise Management at Citigroup, will succeed María Otero, who was recently appointed U.S. Under Secretary of State for Democracy and Global Affairs.

Mr. Schlein brings 25 years of extensive international banking, management and public service experience to ACCION, whose mission is to help alleviate global poverty by providing „micro? loans, financial services and business training to the world’s entrepreneurial poor. ACCION currently works with partner microfinance institutions in 23 countries, and last year helped reach over 3.7 million poor clients with small working-capital loans, savings accounts and other financial products.

As President of Citigroup?s International Franchise Management unit, Mr. Schlein helped manage the bank’s network of 100 Chief Country Officers, who were responsible for performance, regulatory relations, governance and reputational risk in their respective countries. In previous roles, Mr. Schlein oversaw Citi's Human Resources and Global Corporate Affairs. A member of Citigroup's Operating Committee, he also served as Executive Director of Citi?s Business Practices Committee, and as a Director of Citibank, N.A., Poland’s Bank Handlowy and Citibank Korea, Inc.

Prior to his senior posts at Citi, Mr. Schlein served as Chief of Staff at the U.S. Securities and Exchange Commission, as well as Chief of Staff for the New York City Deputy Mayor for Finance and Economic Development. He began his career in public finance investment banking at Smith Barney.

Mr. Schlein has been involved with microfinance for years through both Citi and ACCION. He has played a leadership role at the Citi Foundation, which has a long history of funding microfinance initiatives, and he has served on the Board, and more recently the Executive Committee, of ACCION International. Mr. Schlein also sits on the boards of non-profit organizations Wildcat Service Corporation and New York Cares. He is a corporate member of the Council on Foreign Relations and serves on the Business Council of the Asia Society.

Mr. Schlein holds a bachelor's degree in economics and a master's degree in political science from the Massachusetts Institute of Technology, from which he graduated Phi Beta Kappa in 1984.

“ACCION is enormously fortunate to have Michael take the helm,” said Diana Taylor, ACCION Board Chair. “Not only does he bring the depth and breadth of financial and management expertise that will be instrumental in our global expansion, but he already has an extensive knowledge of the organization.”

“I am honoured to be joining ACCION as President and CEO at this exciting time,” Mr. Schlein said. “ACCION has long been a leader and an innovator in the global effort to alleviate poverty through microfinance, with many 'firsts' to its name. I’m very proud to have the opportunity to help build on that tradition, as ACCION continues to reach beyond its roots in Latin America even further, to help the world's poor in Africa, India and China. There is a greater opportunity today to combat global poverty than ever before, and I look forward to helping ACCION continue and expand its leadership in that crucial effort.”

“It’s been a privilege to serve on the search committee, and we extend our deep thanks to the recruitment firm for their exhaustive work,” said Catherine Quense, acting ACCION president and CEO, who will remain on the organization’s senior management team once Mr. Schlein begins. “Spencer Stuart ran a global search and reached over 150 candidates, from which Michael was selected among extremely strong finalists,” she added.

About ACCION

ACCION International is a private, non-profit organization with the mission of giving people the financial tools they need – micro enterprise loans, business training and other financial services – to work their way out of poverty. A world pioneer in microfinance, ACCION was founded in 1961 and issued its first micro loan in 1973 in Brazil. ACCION International’s partner microfinance institutions today are providing loans as low as $50 to poor men and women entrepreneurs in 23 countries in Latin America, Asia, Africa and the United States. In the last decade alone, ACCION partners have disbursed more than 28.5 million loans totalling $23.4 billion; 97 percent of the loans have been repaid.

AMfB Extends Branch Network to Oke – Arin

ACCION Microfinance Bank Limited, one of the leading microfinance banks in the country, has extended its network base to Oke arin in Lagos, saying it would encourage closeness of banking services to its existing and potential customers within the community.

According to the bank: ‘As part of efforts to empower more economically challenged and low income earners in the country, it opened its first ever stand alone branch to help empower the teaming entrepreneurs within the locality.’

The bank currently has 10 branches spread in various major markets in the Lagos metropolis comprising Idumagbo, Idi Oro, Oyingbo, Trade Fair, Ladipo, Ogba, Pen Cinema, Isale Oja and Ikotun and intends to continually ensure more aggressive network base program in the city.

The bank has also disclosed that it is among the nominees for the microfinance bank of the year in this year’s edition of the prestigious African Banker Awards. ‘Other contenders in the category include Equity Bank and Blue Financial Services, South Africa. The awards ceremony is scheduled to come up in October 6, 2009 at Istanbul, Turkey.’ It added.

Bunmi Lawson, Managing Director and Chief Executive Officer of the bank said that the nomination is indeed an honour and testifies to the fact that it operates at world class standards. According to her: ‘We are amongst the best in Nigeria in our industry since we are the first and only bank to be nominated twice from Nigeria. This is certainly a boost to our shareholders, directors and the entire staff and management of AMfB.’

Speaking further, she said: ‘We are not particular about big outfits and people keep saying that they do not know AMfB. The truth of the matter is that we do not make any noise. We allow our professionalism and good customer services speak for us and we ensure that we are liquid enough for grass root banking.’

Lawson said that micro financing is all about giving small loans to micro entrepreneurs and that AMfB is very careful about ensuring that its customers’ repayment rate remains stable. ‘We intend to cover the whole of Nigeria and that is something that we are working towards. Our relationship with our customers has been most cordial and their repayment process is satisfactory,’ she added.

While speaking on the role of the federal government, she noted that it should provide an enabling environment for microfinance banks to thrive. ‘They should support us with technical training. We really do not need much financial support from them; what we need is an environment that would support our banks.’ She added.

‘I am not entirely in support of federal government funding of microfinance banks because it may lead to customers taking a share of the national cake and that may affect their loan repayment rate. Government should focus more on creating an enabling environment that would attract people who have experience to be able to come in,’ she emphasized.

‘CBN should encourage consolidation of microfinance banks’

Bunmi Lawson, managing director and chief executive officer, ACCION Microfinance Bank Limited, in this interview with VINCENT EKHATOR bears her mind on recent CBN’s reform and implications on microfinance banks.

CBN’s recent banking reform
When there is an earthquake, there is always an initial pause. But I am convinced that the banking sector, after the clean up exercise, would remain strong and safe because I believe that the action of the Central Bank of Nigeria (CBN) is in the best interest of the banking public and the nation in general. The removal of the managing directors and executive directors of five banks and the disclosures and publishing of debtors’ names was a shock. It is an issue that is quite surprising. CBN and the Economic and Financial Crime Commission (EFCC) really need to give some of these debtors more time to liquidate some of their assets. This would enable them to effect payment because even when they have the money they may have to liquidate assets before upsetting their debts.

Challenges facing MFBs
When I look at MFBs generally, there are number of things that are glaring. The market is still very young and as a child, you would first learn how to crawl before you can work. Generally, people have been used to that rapid bank growth and MFBs may have also copied the big banks. So, that has led to some liquidity crunch because the capitalisation of MFBs is far smaller than the commercial banks and so, when you start using your capital to build gigantic branches, you may end up not having enough money for your target market. I think that the problem, to a large extent, was not that they were not lending to the economically active poor but they were busy buying cars and building fancy houses instead of actually focusing more of their portfolio to lending activities or mobilisation of savings. The other thing is that micro finance banking as it should be practiced is not being properly practiced here in Nigeria. The principle behind MFBs is that you give a lot of small loans and you should ensure that you have a steady capital base that would enable you meet any liquidity problems at any point in time. Most MFBs operators are regrettably not too conscious about their lending processes. They give loans to too many people without proper monitoring and at the end of the day, what you would hear are issues of bad loans. MFB operators lend to Small and Medium Enterprises (SMEs) and instead of giving to say 10 people, they actually loan to over 10,000 clients and before you know it, there would be cash problem. As you know, MFBs are still very new and people are not yet putting many deposits into them. So, they do not have huge credit to give out to the active poor and they do not have enough funds from the commercial banks. All of that just made it to be a bit difficult for them.

‘Microfinance Banks need N3tn to service MSMEs’

The Chief Executive Officer, ACCION Microfinance Bank Limited, Mrs. Bunmi Lawson, speaks on the role of microfinance banks in economic development in this interview with Sulaiman Adenekan. Excerpts:

What is micro financing?
Micro financing is the provision of financial services to low- income persons. Basically, we believe that it is part of how low -income persons can work their way out of poverty by providing them with access to finance so that they can take advantage of the opportunities at their disposal. Low- income persons who are already in trade trying to get additional capital for their businesses and increase their income that is what micro finance is.

What is the difference between micro financing and commercial banking?
Micro finance, as I said, is focused on low- income earners, small traders, etc. For example, a trader in Oke-Arin market who sells provisions, a tailor, a barber who has a small shop. Micro financing involves small amounts of finance; it could be small bits of savings and loans. Whereas for commercial banking, you are looking at a larger scale loan. For example, a commercial bank could be looking at a N5bn credit facility to big companies while we may be looking at a N50, 000 credit facility to a shoemaker to our target market.

What are the roles of micro finance banks in Nigeria?
The role of micro finance banks is to bridge that gap between financial services that is only available to high network individuals and corporations. We are trying to ensure micro entrepreneurs, small businesses and individuals have access to financial services. There are many people who walk into the bank and obtain a loan. So also, you should be able to walk into a micro finance bank and show a track record of your business and apply for a small loan; that is the gap that micro finance banks are trying to bridge. When you look at most economies, small businesses and micro entrepreneurs are really what drive the economic engine. We have found that in the past the commercial banks have only focused on the top 35%t while 65% of the Nigerian population do not have access to finance at all. The gap is what the micro finance banks are supposed to bridge.

What are the challenges facing micro finance banks in the country?
The major challenge is infrastructure. The cost of doing business in Nigeria is so high. Infrastructure has limited the number of branches you can set up and because we are lending money in small amounts, we need to be as efficient as possible. You spend most of your capital on infrastructure whereas you are supposed to use that capital to provide loans to micro entrepreneurs; so that is quite a challenge. The second one is the issue of liquidity. For commercial banks, because they deal with big companies, those companies are able to save large amounts of money, so they are able to raise large deposits. They have a large number of branches. Whereas micro finance banks are struggling to get capital, so we don’t have that spread. The issue of balancing the cost of operation and access to capital are key challenges that micro finance banks face. However, we have been lucky because we have strong backers, so we have been able to surmount those challenges.

Gliding with big vision, deft moves, Bunmi breaks financial frontiers...

Hard work is good but if there is no access to money, there may be nothing to show for it. With a disarming smile, she ushers you right into her presence and as you attempt to take a quick look at the posh furnishing of her office, you are instantly confronted by the various merit badges and plagues on parade. There and then, you conclude, there is indeed a growing army of women doing the female folks proud. There are more and more women now serving as a source of inspiration to other women who desire to attain higher heights.

But with over twenty years of work experience in both the finance and private sector, you indulge in a warm smile, Bunmi Lawson, after all is no small fry in the industry. She sure stands as your example of an inspiring woman. It’s no surprise therefore that today she sits as the CEO of ACCION Microfinance Bank.

Speaking on her journey so far, she reflects: “My father had always been a strong influence. He wanted me to be in the finance world even though I wanted to be a doctor. I later studied accountancy at Yaba College of Technology after which I did my Institute of Chartered Accountants of Nigeria (ICAN) exams immediately after my NYSC at KPMG in Jos.

‘I foresee consolidation in microfinance banking soon’

Patrick Akinwuntan, chairman ACCION Microfinance Bank Limited, in this interview with Vincent Ekhator speaks on the challenges facing microfinance banks.

Appointment of new CBN governor
Sanusi Lamido, Governor of the Central Bank of Nigeria (CBN) is well known in the industry. He is an outstanding professional with a credible track record. Against this background, we are optimistic that we will have a sound regulatory environment in the financial services with emphasis on good corporate governance, transparency and accountability. He also has the goodwill to carry out whatever that is required to deliver his mandate. We wish him the very best in this assignment.

Interbank market for microfinance banks
The primary role of the microfinance industry is to empower low income earners that are economically active through access to finance in order to realize their potentials. With the required capital to set up a microfinance bank, a well run microfinance bank should not have recourse to inter – bank on a permanent basis. A good microfinance bank should be able to raise adequate capital and mobiles savings to fund its operations.
However, speaking generally about the inter – bank market, it provides a window through which unforeseen temporary gaps in the funding requirements of a microfinance bank may be met. Anytime a bank becomes permanently dependent on inter – bank, it is a sign of severe strains on the liquidity position of that particular bank. For us at ACCION MFB, we do not use the inter – bank market to support our operations. Our operation are supported by capital put together by our shareholders, that is , daily savings by our customers, repayment of our loans and the reinvestment of profits made into the business.

ACCION raises capital base to N1.2bn

The institutional shareholders of ACCION Microfinance Bank Limited have taken steps to further position the company for greater impact by raising the share capital from N578 million to N1.24 billion during the 2008 financial year.

ACCION MFB lauds Lamido’s appointment as CBN governor

ACCION Microfinance Bank Limited, one of the leading microfinance banks in Nigeria lauded the appointment of Sanusi Lamido as Central Bank of Nigeria (CBN) governor saying he has the necessary goodwill to execute the job.

ACCION MFB disburses N2 billion micro-loans within 2years

ACCION Microfinance Bank Limited one of the leading microfinance banks in Nigeria has disbursed over N2 billion micro-loans to more than 12,000 customers across Lagos state, since inception in May 2007.

ACCION MFB’s gross income rises by 76%

ACCION Microfinance Bank Limited has recorded a gross income of N409m in its financial results for the year ended December 31, 2009.This amount represents an increase by 76 per cent or N177m over the N232m it recorded in the similar period if 2008.Its total assets also rose by N679m or 101 percent from N678m in 2008 to N1.375bn in the year under focus. Our loan portfolio also grew from N87m to N667m, while our paid up capital rose up to N908m from N578m recorded in the previous year.

ACCION Microfinance Bank Nominated for ‘African Microfinance Bank’ Award

ACCION Microfinance Bank adds a feather to its leading status cap as it is amongst nominees for the microfinance bank of the year in this year’s edition of the prestigious African Banker Awards. Other contenders in the category include K- Rep, Equity Bank, Barclays and Development Bank Mauritius.

ACCION Microfinance Bank Hosts Nigeria Economic Summit Breakfast Meeting

ACCION Microfinance Bank will host a breakfast meeting at the Nigerian Economic Summit this Thursday in Abuja. A statement issued by the bank said the theme of the breakfast meeting is ‘The Race to 2020: Making the Impact of Microfinance in the Nigeria Economy a Reality’, with the keynote speaker being the acting Director, Other Financial Institutions Department, Central Bank of Nigeria, Mr. Femi Fabanwo.