... Award dedicated to the Mgt and Staff members of the UPMFB
— 31st May 2017
When CBN rewards microfinance houses in Enugu
The Umuchinemere Pro-credit Micro Finance Bank (UPMFB) has won the 2016 edition of the Central Bank of Nigeria (CBN) Best Microfinance bank award in the apex bank's Agricultural Credit Guarantee Scheme (ACGS).
The award was given at the CBN's sensitisation workshop on intervention schemes and programmes for microfinance banks, as well as the award ceremony for three of them that did excellently well last year.
The event organized by the Development Finance Office (DFO) of the CBN Enugu, saw the Umuchinemere Microfinance Bank taking the first position among all the microfinance banks that participated in the scheme UPMFB was selected from the over 20 microfinance banks the CBN reviewed their performance on ACGS last year.
The acting Head, DFO, Mr. Henry Longui, who moderated activities at the workshop and ceremony told a news publication, Oriental News, that "we considered over 20 of them who are participating in the agricultural credit guarantee scheme fund; they were considered in terms of the volume of their participation, that is, the number of farmers they got to participate in the scheme."
Longui explained that the ACGSF was just one of the programmes they have, pointing out that they equally have so many others.
Speaking at the event, the Head, Other Financial Institutions Supervision Department (OFISD), Mr. Anthony Ofulue, who thanked the DFO of the bank for coming up with the novel initiative., urged the microfinance banks to take advantage of the scheme which gives them money at two per cent interest while they give out at nine per cent interest rate. Going down memory lane on how the scheme was established, he said: "The Central Bank of Nigeria (CBN) in an attempt to increase the flow of credit to the agricultural sector established the Agricultural Credit Guarantee Scheme Fund (ACGSF) in 1977.
"The initiative was also to induce banks to increase lending to the sector. The scheme seeks to reduce the challenges faced by farmers in accessing credit for production by reducing the risk exposure of commercial banks. It was to encourage banks to shore up lending to the sector through the provision of a guarantee cover to loans given by banks for agricultural purposes. The scheme is to date is considered to be the oldest/long operated credit guarantee scheme in Africa. "In spite of the guarantee offerings of 75 per cent to the lending financial institutions as an incentive and interest drawback of 40 per cent to the farmer, bank lending to the agricultural sector has remained below 10 per cent of total lending in the country.
Ofulue therefore said that the essence of the event was to enhance participation in the ACGS and encourage banks doing well on the scheme to redouble their efforts. Also, the Assistant Manager, CBN Enugu, Mr. Gbolahan Olumide, told the participants that the ACGSF was like a partial substitute to banks' collateral requirement for agricultural lending.
He said that the scheme encourages the microfinance banks to lend to agricultural business by providing them with a guarantee cover. Olumide mentioned some of the activities covered under the scheme to include crop and livestock production, processing and marketing. He said that as part of incentives derivable from the scheme, the farmers have been given 40 per cent rebate to reduce their borrowing cost through high interest rate, as well as to reduce and forestall the loan default.
Looking at the modalities for the Interest Drawback Programme (IDP), Olumide said that "farmers borrow from the banks at market determined rates," while the banks provide interest rebates to the farmers under the scheme to lessen the cost of borrowing and high interest rate. According to him, the CBN has so far paid a total of ₦2.152 billion as rebates to 265,983 farmers under the scheme.
Responding on behalf of the three microfinance banks that won awards, the Chairman of Umuchinemere Pro-credit Micro Finance Bank, Msgr. Anthony Anijielo, ably represented by the bank's Board Credit Committee chairman, Chief Gilbert Obu, thanked the CBN for instituting the award. He dedicated the first prize award of the Umuchinemere Microfinance to the hard working management and staff of the bank, promising that the microfinance banks in the state would continue to work hard to sustain the scheme
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