Bad Political Policy Negatively Affecting Micro-Finance Institutions

By Iduozee Paul, Benin Correspondent The founder /chief executive officer, K-Rep Group, Kenyan, Kimanthi Mutua, has disclosed that one of the

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By Iduozee Paul, Benin Correspondent

The founder /chief executive officer, K-Rep Group, Kenyan, Kimanthi Mutua, has disclosed that one of the major reasons micro finance institutions are not growing well in Africa because of bad political policies enacted by various governments. He disclosed that those bad policies often come through the Central Bank of Nigeria(CBN).

Kimanthi Mutua, who, was guest lecturer at L’Universie’Libre de Bruxelles made the observation at the Third International Micro-finance Workshop in Benin-City. He said raising operational funds in micro finance institutions requires planning, financial management,investment in micro finance banks and adequate leadership skills.

Kimanthi’s who has 30 years’ experience in micro finance stated that running effective micro finance institutions requires flow of capital. He said, the amount of capital needed to run micro finance institutions depends on the regulators, adding, that to maintain the flow of capital, there must be better rules to regulate the bodies.

 Commenting on the theme, “Funding Strategies for Micro finance Institutions/Banks,” Kimanthi asked participants to focus always on re-capitalization, reality check, retreat strategy, internal plans, and setting

up of more strategic structures.

According to him, to excel, micro finance bodies/banks must have the capacity to negotiate for capital.

 In his an address of welcome, the director general of LAPO Institute in Nigeria, Dr. Kenneth Okakwu, in his contribution said, “The international Micro finance workshop is the premiere platform that has been providing micro finance practitioners and the public with information to stimulate financial inclusion in Africa since 2017. We are one of the organizations in the African space with the vision, experience, expertise and entrepreneurship to meet these challenges and create pathway to sustainable inclusive finance.”

In his presentation on, “Funding Strategy for Micro finance Banks/ Institutions”, Dr. Godwin Ehigiamusoe, said their core aims through series of workshops, is to equip the leadership in the micro finance sector

in the continent to maximize the gains of access to finance for Africans.

Dr.  Ehigiamusoe who is the managing director LAPO Micro finance Bank Limited, posited that the micro finance leadership forum is designed to address strategic issues vital to the expansion of the frontiers of finance in Africa.

“In view of our development realities,access to finance for all is imperative. Africans confront the challenges of poverty, unemployment, particularly, youth unemployment and constrained access to quality health services. There is a consensus on the place of access to finance in addressing these challenges. Over the past three decades, a number of micro finance institutions have been active in Africa; there is still much to be done.”

He stressed that capital is key.

 “Achieving these aims will need enormous capital. It is in realization of this fact that regulatory authorities prioritize capitalization. The case of funding for micro finance especially in Africa has remained that of water, water everywhere, but not a drop available for many. 

 “Funding instruments have been few and largely grants in early days, and debts and with little equity commitment. The stringent conditions attached to access foreign debts have led to very few institutions as recipients. To attain the desired scale financing of various options and instruments are required. These include: affordable debts, equity, bonds and other financial instruments,” he added.

 The three day event also featured presentations by different speakers and experts in micro finance business also used the opportunity to assembly in a round table discussion to chat on a modern days of enhancing the career. There were goodwill messages from invited bank representatives who spoke on various topics.