MFB subsector’s deposits surge by 168% in Q2 2024

The Microfinance banking sector has continued to record impressive performance in all key assessment parameters with the total deposits surging by 168 percent to N1.25 trillion at the end of the second quarter this year (Q2 2024), despite the lingering whirlwinds in Nigeria’s economic landscape.

Similarly, the subsector’s total assets grew to N2.795 trillion, representing 91 percent increase year-on-year as of the end of June 2024.

Highlighting the performance of the subsector in his welcome address during the National Association of Microfinance Banks’ (NAMBs) 2024 Annual General Meeting (AGM) held over the weekend in Abuja, the association’s National President, Mr. Joshua Ukute, also disclosed that as of the end of June 30, 2024 the efficiency in the sub-sector leaped as PAR improved by 13.09 percent to 12.25 percent and the Liquidity Ratio was 65.46 percent due to increased lending.

The world-class banker largely attributed the sub-sector’s sound financial and operational results of the operating Microfinance banks (MfBs) during the period to the Visibility, Impact, Capacity Building and Self-Regulation (VICS) project initiated by the executive council of the association on his assumption of office two years ago.
He said, “The last 12 months have been exciting as the Microfinance sub-sector witnessed significant growth. Reports from the Central Bank of Nigeria as of 30th June 2024 stated that the Total Assets of the Sub-sector increased by 91 percent to N2.795 trillion.
“Total Deposits increased by 168 percent to N1.25 trillion and total loans increased by 34 percent to N1.382 trillion. Efficiency in the sub-sector improved as PAR improved by 13.09 percent to 12.25 percent and the Liquidity Ratio was 65.46 percent due to increased lending”, Ukute added.
He recalled that the association during his tenure engaged several partners to ensure that the activities of MfBs had the desired impact on all stakeholders, adding that “our engagements with various agencies NFIU, FIRS, BOI, DBN, etc, deepened the collaborations and relationships with our members.”
According to him, the focus of his leadership in the association within the last year has been on initiatives that will have direct impact on MfBs as the Secretariat facilitated major programmes that have positively impacted member-banks on issues relating to compliance, skills improvement, regulators’ relations, etc.

Ukute told the association’s members that though the achievements recorded were impressive, the sub-sector continued to face some challenges, including increasing operating expenses occasioned by high energy costs, dearth of skilled staff, and inflation which continued to pressure on members’ businesses; the compliance regime of CBN, and the revocation of Heritage Bank’s licence, which has had ripple effects on MfBs with trapped funds in the liquidated bank.
While thanking the members for their support during his 2-year tenure, Ukute assured them of the commitment of the association’s leadership to new initiatives aimed at ensuring sustainable growth of the sector and prevention of failure of MFBs in the years ahead.
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