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Umuchinemere Procredit

Microfinance Bank Nigeria Limited

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UP-MFB decries non repayment of loans as major obstacle against Poverty Eradication in the Country

One of the leading microfinance banks in the country, Umuchinemere Pro-credit Micro Finance Bank, (UPMFB) Enugu, has cried out at non-payment of loans and delays by customers in repayment of credit facilities given to them as a major obstacle militating against its poverty eradication efforts and that of other microfinance banks in Nigeria.

Decrying the situation in his statement, chairman of the bank, Very Rev Monsignor Obiora Ike, told the bank's shareholders at its 15th Annual General Meeting that the bank was compelled by banking rules and regulation to write off over N70 million of its profit in year 2010 because of the problem of non-payment of loans by some customers.

The Umuchinemere Microfinance bank chairman lamented: "Many people come to bank collect money; use it to do business but when it is time to repay the loan, they deploy all manner of antics not to repay the money. They tell the bank don't disturb me, and when the bank comes a second time they change address and when the bank traces them to their new location they will go to court and say the bank is disturbing me. That is the phenomenon happening in Nigeria: people taking loan and not wanting to repay, thereby hampering the efforts of our bank and other microfinance banks in poverty reduction".

The bank boss who is also a professor of Ethics at the Godfrey Okoye University Enugu, a sister institution to UPMFB owned by the Catholic diocese of Enugu, said however that despite all odds Umuchinemere Microfinance bank was able to eke out a net profit-after-taxation of a total of N27.4million, or 11kobo earnings per Share in year 2010, which was ploughed back to the bank's Share reserve to beef up its share capital.

While the bank's customer base moved up from 31,782 in 2009 to 43,172 in 2010, Prof Ike noted that despite the cold operating environment in 2010, the bank made remarkable progress in certain aspects of its financial activities in the year under review, as it recorded appreciable increase in its paid up capital and asset base from N222, 181,570 to N247, 916,510 and from N1.3m to N1.5m in 2010 respectively.

He said the activities of the bank over the years, especially during the period under review, got wide acknowledgement and earned it more investors from both within and outside Nigeria, as Enugu state government for instance had finalised arrangements for 200 more cabs to be added to the over 500 fleet in its poverty reduction scheme in transportation area managed by the bank.

Not happy that the bank used its profit to repay the loans some of its customers took, as its shareholders' fund experienced a reduction as a result of adjustments and provisioning that included total write off of bad debts, the Umuchinemere bank chairman exhorted loan defaulters to act with integrity and keep their promise to repay their loans, urging the shareholders however to enhance their equity participation in the bank.

"We are faced with the challenges of delays by some customers in the repayment of loans administered as and when due, resulting in the write off of such debts from our reserves", the chairman further informed the bank's stakeholders, urging them to assist in ensuring that facilities borrowed from the bank are promptly repaired.

Monsignor Ike charged the bank's Correspondence banks to collaborate with it in activities that will progress the active poor people and not just looking for the bank's placements.

Earlier, the Legal Holder of the bank and bishop of Enugu Catholic diocese, Rt. Rev. Dr. Callistus Onaga, represented on the occasion by his Vicar General, Very Rev. Mgr. Luke Adike, thanked the bank for all its good services to the children of the diocese and the entire Enugu state. Describing the bank as one of the best in the country, the prelate explained that it was not just established to make money but to serve as a veritable instrument of spreading the Good News and proclaiming the gospel through economic emancipation of the people, charging the bank to keep to banking rules and maintain good relationship.

The Annual General Meeting approved the appointment of three new directors for the bank.

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