Much Ado About Nothing: The Case of the Nigerian Microfinance Policy Measures, Institutions and Operations
This paper examines Nigeria's microfinance policy, institutions and operations. It evaluates their effectiveness in helping poor people and recommends measures to achieve microfinance policy objectives related to the Millennium Development Goals by 2015. Studies reveal huge untapped potential for financial intermediation at the micro and rural levels of the Nigerian economy. The government has attempted to fill this gap by:
- Enacting legislation to establish MFIs;
- Licensing NGOs to operate as MFIs;
- Developing regulatory and supervisory guidelines for microfinance banks.
The government's efforts to secure sustainable access to microcredit for the poor in Nigeria have failed due to high operating costs, repayment problems, weak refinancing facilities, client apathy and drop out. The paper suggests that Nigeria could realize microfinance policy objectives and attain the Millennium Development Goals by 2015 by using the additional liquidity provided by the new microfinance bank, following group delivery methods, developing efficient management information system, involving clients, using microfins and effective monitoring.
