fbpx
[ MAIN ]BANKING & FINANCENEWS

MFBs’ Non-Performing Loans Rises To 61.9%, Way Above 5% Benchmark

Poor asset quality is currently plaguing the microfinance segment of the finance industry, as available data indicate that total non-performing loans (NPLs) held by the microfinance banks (MFBs) as at the end of December 2012, stood at 61.9 percent of their total loan portfolio. According to the Central Bank of Nigeria (CBN), is 5 percent,hence.

Industry analysts and monitors say the increasing rate of NPLs among the MFBs is as a result of the fact that most of the institutions were yet to formulate their risk management frameworks, as well as the growth in number of the institutions in the review period from 870 to 882.

To this end, the CBN had concluded plans for all MFBs to attend an enterprise risk management training in 2013. However, operators are calling for the establishment of a re-financing institution to help the MFBs refinance the bad debts.

Chairman, National Association of Microfinance Banks (NAMB) South West zone, Olufemi Babajide,also acknowledged the need to address the issue of NPLs in microfinance, arguing that “5 percent benchmark of NPLs is not realistic, considering the challenges faced by MFBs in the country.”

SOURCE

About Author

Comment here

This site uses Akismet to reduce spam. Learn how your comment data is processed.