(L-R) Arch Nuhu Wya, minister of state for power discussing with Mrs Bolanle Onagoruwa, DG, Bureau of Public Enterprises and Alhaji Mohammed Hayatudeen, chairman, technical committee, National Privatisation Council, at the a power investors forum in Lagos recently.

A Dutch firm, Oikocredit International is set to extend rescue funds to microfinance banks in the country, BusinessWorld can now reveal. The funds, investigation shows, is being funnelled through the National Association of Microfinance Banks (Namb), Lagos State chapter, such that the 187 microfinance institutions in Lagos can benefit from the scheme. The funds which is one of the steps taken by Oikocredit to financially assist microfinance houses in Nigeria, is meant to ensure that microfinance banks in  Lagos State are financially strong to operate in the financial sector of the economy.
The Central Bank of Nigeria (CBN) had last year withdrawn licences of 103 microfinance institutions because they are financially weak. Lagos State accounted for 35 per cent of the number. This initiative, Oikocredit said, will make benefiting banks survive the test of time. BusinessWorld can confirm that interested microfinance banks can benefit from the fund through their association (Namb), Lagos State chapter.  However, sources said there is no limit to the amount to get, provided basic criteria for accessing the funds are met by willing institutions.          
In a document highlighting the criteria, which was made available to BusinessWorld, the interested MFB must have an operating licence issued by CBN and must have three years audited account, even as such bank must be making profit. While the lending institution requires the would-be beneficiary to have a strong management team, OikoCredit also said such banks should have a minimum of 500 loan customers and 1000 saving customers. In addition, it was gathered that the bank must equally meet recommended liquidity ratio as well as operate an account with a deposit money bank acceptable to the Dutch firm.
Any willing institution is expected to forward its request through the association which will guarantee such member bank, a source said. Speaking on the development, Mr Olufemi Babajide, acting chairman, Namb, Lagos chapter said the funds will be for identifiable banks and would be devoted to refinancing of projects in respective banks. 
The association, he said, approached the Dutch firm in November last year to mobilise rescue fund for its member banks that were facing liquidity challenges.
He stressed that the life-line will go a long way in ensuring that microfinance banks in the state are able to execute their entire projecst, thus making them financially strong to withstand competition. 
While stating that discussions with Nigerian banks and other offshore development financial institutions for the provision of support for microfinance banks in Lagos are ongoing, the chairman noted that the association is doing everything possible to return microfinance banks back to profitability.