MFB EXPERT DECRIES NON-REPAYMENT OF LOANS

By AMAKA ABAYOMI, with agency report
The chairman of Enugu State-based Umuchinemere Pro-credit Microfinance Bank (UPMFB), Very Rev Monsignor Obiora Ike, has fingered the increasing non-payment of loans and undue delays by customers of microfinance banks in repayment of credit facilities given to them as the major obstacle militating against poverty eradication efforts by microfinance banks (MfBs) in Nigeria.

Speaking at the bank's 15th Annual General Meeting, Mon. Ike said UPMFB was compelled by banking rules and regulation to write off over N70 million of its profit in year 2010 as a result of non-payment of loans by some customers.

According to Ike, 'Many people come to bank collect money and use same for their businesses, yet they deploy all manner of antics not to repay the money. They say we are disturbing them when we go to collect the money, and when we persist, they change addresses.

'In most cases that the banks are able to traces them to their new locations they go to court and say the bank is disturbing them. This is what is happening in Nigeria: people take loans and don't want to repay, thereby hampering the efforts of MfBs in poverty reduction.

'It is not fair that the bank used its profit to repay the loans some customers took, as its shareholders' fund experienced a reduction as a result of adjustments and provisioning that included total write off of bad debts.'

Despite all odds, UPMfB recorded a net profit-after-taxation of N27.4 million or 11 kobo earnings per share in 2010, which, according to the chairman, was ploughed back to the bank's share reserve to beef up its share capital.

'Our customer base moved up from 31,782 in 2009 to 43,172 in 2010. We also recorded appreciable increase in our paid up capital and asset base from N222,181,570 to N247,916,510 and from N1.3 million to N1.5 million in 2010 respectively.'

He said the activities of the bank over the years, especially during the period under review, got wide acknowledgment and earned it more investors from both within and outside Nigeria, as Enugu state govern-ment, for instance, had finalised arrangements for 200 more cabs to be added to the over 500 fleet in its poverty reduction scheme in transportation area managed by the bank.