ACF writes Emefiele: North is financially marginalised

The Arewa Consultative Forum (ACF) has written to Godwin Emefiele, governor of the Central Bank of Nigeria (CBN), complaining about alleged financial exclusion of northern states.

In the letter signed by Audu Ogbeh, its national chairman, the ACF said the north is “unserved and underserved” despite its status as the most populous region in the country.

The former minister of agriculture lamented that the government’s policy of financial inclusion aimed at the grassroots may not succeed in the northern part of the country.

“The microfinance banks that are looked upon to serve the majority of the people all over the country are not properly positioned to do this,” he said.

“Only one government owned microfinance which is fairly new in the business is being patronized by CBN to disburse intervention funds, thereby neglecting and denying other duly licensed microfinance Banks across the country the privilege and opportunity to participate in this noble cause.

“This bank enjoys the unfair advantage of cheap government funds while other microfinance banks have to source for expensive funds to compete with the favoured bank in the same market.”

He said other microfinance banks must be involved for the government’s intervention funds to the economically-poor and micro, small and medium enterprises (MSMEs) to be successful.

Ogbe condemned the apex bank’s new capital requirement for microfinance banks, saying “the astronomical review of CBN’s new capital requirement will see to the demise of most of the microfinance banks presently operating in the north”.

According to Ogbe, only 310 microfinance banks are operational in the north, adding that the new policy would result in the survival of only 15 percent of them.

“This development will further exclude a good part of the north from financial services and inclusion, compound the negative effects of the second wave of COVID19, aggravate the poverty level of the north and weaken the insecurity of the region,” he said.

Noting that the April 2021 deadline for the recapitalisation of the microfinance banks was too close, he suggested that it should be shifted to April 2025.

He explained that this will give the banks extra time to source the funds needed at this time of economic downturn.

Ogbe appreciated the apex bank’s contributions towards alleviating poverty and urged Emefiele to consider the forum’s suggestions “in good faith”.