HOW important is the role of microfinance banks in the development of the economy?
Microfinance bank is highly important in every economy, because we concentrate majorly on the poor. Microfinance banks in their various models assist to reduce and alleviate poverty and enhance economic development, particularly in developing economies. In Nigeria, we have accelerated the operation of poverty alleviation programmes of the government and supported promising entrepreneurs while aiding new ones to emerge. The role of microfinance banks in the promotion of national economic development is entrenched in the objectives of the microfinance banking scheme in Nigeria that was formulated in line with the objectives of the Millennium Development Goals (MDGs), the National Economic Empowerment and Development Strategy (NEEDS) and the Vision 2020. These roles include the promotion of rural development through financial intermediation, stimulation of productive activities in the rural sector, development of banking habits among rural dwellers, ensuring the development of an integrated national financial system and improving the economic status of small scale producers in the rural and urban areas. Microfinance banks (MFBs) are therefore strategically positioned to expand the financial frontier and stimulate the exploitation and development of economic opportunities in the informal sector through the provision of traditional and even non-traditional banking services.
What distinguishes Fullrange Microfinance Bank from others?
Currently in Nigeria, we have about 1,050 microfinance banks. And we still discovered that the level of unemployment is about 24 per cent and we have about 70 million people that are living below USD2 per day according to the World Bank research. This is below one thousand naira, this simply means that some people still find it difficult to have three square meals on a daily basis. Fullrange Microfinance Bank was licensed to bridge that gap and also reduce the level of unemployment and also reduce the level of unbanked in the country and we came up with well-tailored products for this class of customers, the consumers, unbanked, underbanked and generally the poor. One of the products is our regular savings account and also we do daily savings account. We also have a loan scheme that puts people of the same business together, we put them in cluster, we have five in a group minimum of five people and maximum of ten. We avail them soft loan facility of N50,000 to support their businesses. We have also invested so much on digital banking services which include our ATM, USSD code and mobile banking application to enable our customers have access to their funds. Though the level of customers we deal with are in the rural areas or market areas in the city. They might not have time to leave their shed or their comfort zone to come to the banking hall to make their transactions. With a Java-enabled phone, they will be able to make their transactions via our USSD code, if they have access to an internet-enabled phone they can also do their transactions via mobile banking and also do their transactions through ATM cards. They can also use the card on any ATM in the country. We are also doing well in terms of Youth Banking, We have a good product packaged for our youths. Youths with great business plan especially graduates and undergraduates with good business plan. We have been investing heavily in their projects and ensure we migrate them from the level of unemployment to employed youths and we have seen youths that are also recruiting their classmates into their businesses with the support from Fullrange Microfinance Bank. We have also done well for women in business, of recent we launched our kiddies account which was targeted at helping parents to do savings towards the payment of their children’s school fees and other projects or plans they might have for them. And we stepped in by also making provision for school fee payment especially in January and September. Most schools do their school fees drive first week after resumption and we discovered that some parents do not meet up because of issues with their businesses or delay in salaries by their employers. Fullrange Microfinance Bank now decided to take responsibility of the school fees payment and the parents are allowed to pay back in three months. We pay directly to the school to avoid cases of funds diversion where we will give money to the parents and they use the money for something else. We ensure that we do not give room for that. We ensure we do value chain business here, once you have an account from a family we take everybody alongside in that family or from your business, we take everybody alongside in that business. If a husband’s account is domiciled with us, we also ensure we do business with the wife as well as the kids.
How flexible is the repayment of loans at Fullrange Microfinance Bank?
We ensure we do customer profiling and we take away the risk of product mismatch because we have seen that it kills some of the businesses. A business that deserves prototype A should not be given prototype B, because the effect of the trade will be suicidal that is talking from experience. So what we do is to match the right product to them, we do profiling of the customer, we also profile the business, we do the cash flow analysis and that determines how much we give out as loans. We give them maximum tenure of six months to pay back, if we are giving you money to put into your business, we ensure that it is the kind of money you will be able to pay back conveniently at the stipulated time. So far so good, 90 per cent of our customers who took loans arepaying back with ease. We only have issues with less than 10 per cent of them but not withstanding environmental issues, economy or issues beyond their own means so we have understanding with them and we are training them on how to manage their finances.
How effective is your Corporate Social Responsibility?
Highly effective , one of it was the project we did for youths around the city of Ibadan through Fullrange Leadership Academy and more of it would come before the end of the year.
and then