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The future of microfinance sector seems bleak as only
18 million out of Nigeria’s active adult population (about 21 percent)
can access financial services to boost economic development.

The Resident Country Representative of the United
Nations Development Programme (UNDP), Dauda Toure, who identified women
and youth as making up the critical mass of the affected population,
said about 64 million Nigerians or 74 percent, has never been banked,
while only 4 million, or 5 percent, have previously owned a bank
account. Mr Toure told NEXT at the opening of a microfinance training
programme in Abuja that though various stakeholders have keyed into the
country’s microfinance landscape since it was launched more than five
years ago, very little impact has been recorded, adding that there are
strong possibilities that set objectives of the microfinance sector may
not be achieved by 2020. The sector’s poor record of performance, Mr
Toure explained, was attributed to the apparent lack of capacity,
inadequate coordination and synergy, policy shortfalls, lack of
detailed articulation of stakeholders’ roles and responsibilities in
the various sector’s operations.

To facilitate the reversal of this trend in the
sector, the Country Representative said the UNDP, under its private
sector development programme (PSDP), is currently providing support to
the Central Bank of Nigeria (CBN) for a five-year national microfinance
development strategy for Nigeria. The support to the CBN, Mr Toure
said, comes, basically, in the form of technical assistance designed to
serve as a catalyst to the achievement of sector goal, adding that the
technical assistance has so far facilitated the current national survey
and assessment of the sector as well as the on-going policy review
process supported by both international and national consultants
deployed by UNDP and United Nations Capital Development Fund (UNDCF),
who provide the technical inputs. “We are attempting to develop a
programme that will ultimately build sufficient capacity in the
microfinance sector to expand and deepen the delivery of sustainable
inclusive financial services across Nigeria,” he said, pointing out
that the training programme was one of such activities aimed at
building capacity to address identified gaps in the sector.

The two-week management training on how to make small loans work to
lift the poor and better support the informal sector, he explained, is
targeted at key managers of state-supported microfinance institutions,
microfinance banks and relevant government officials to broaden their
understanding on how to deliver inclusive operations and boost
productivity. Besides, it will also help furnish participants with the
necessary tools to enhance their performance, develop their
perspectives and practical skills to manage, improve and expand
microfinance services to the poor.