Micro-Finance review

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Where can I find a Microfinance loan in Nigeria?

Currently there is a vast array of MFBs in Nigeria (over 1000 with over 200 in Lagos) which include unit MFBs, state MFBs and national MFBs. Collectively MFBs are much smaller than the banks with a total lending portfolio of N 53 billion (USD 342 million)16 to the sector. Regulations by the Central Bank of Nigeria (CBN) require MFBs to lend at least 80% of their loan portfolio to micro enterprises

Who are microfinance lenders?

Microfinance in Nigeria?

Microfinance services refer to loans, deposits, insurance, fund transfer and other ancillary non-financial products targeted at low-income clients. Three features distinguish microfinance from other formal financial products:

  • smallness of loans and savings,
  • absence or reduced emphasis on collateral, and
  • simplicity of operations.
National Association of Microfinance Banks

The National Association of Microfinance Banks NAMB’s 900 member banks in 2012 generated NGN 125 billion (USD 770 million) in revenue for a total of NGN 97 billion (USD 600 million) in disbursed microloans to a client list of approximately 6 million members.

Financing for Microfinance lenders

Inter bank rate

The inter bank rate has increased from 3.01% to 23.42%. The interbank rate is the rate of interest charged on short-term loans between banks. Banks borrow and lend money in the interbank lending market in order to manage liquidity and satisfy regulations such as reserve requirements. The interest rate charged depends on the availability of money in the market, on prevailing rates and on the specific terms of the contract, such as term length

The interbank rate is a function of the components listed below;

  • risk of default,
  • a premium related to the demand for funds, which depends on the funding liquidity of the borrowing bank,
  • Market-wide conditions include the uncertainty about the path of expected overnight rates, which is reflected in a term premium, the ease of trading,
  • Market liquidity, and
  • factors related to the fixing process and the microstructure of the market (micro)


The total domestic deposits have increased from NGN 17.4trn to NGN 18.1trn in Q3 2016. The total bank deposits stood at N17.2 trillion, as at December 2015, according to the Central Bank of Nigeria,.

Loan to deposit ratio up from 68.78% to 79.32% in Q3 2016 according to CBN data. Shows that deposits could be further utilized to extend credit to the economy.

Liquidity in the commercial banks has increased in the banks QoQ despite the recession and an increase in the interbank rate. The reduced economic activity associated with the recession increases the credit risk and liquidity risk to the banks, as customers withdraw savings deposits and delay loan repayments



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Student Loans

Student Loans

Loan companies vary based on the types of fees they charge with their loans.




Types of Loans

Types of Loans

There are many different types of loans, learning the differences between the various types of loans will help you identify which loan will best suit your needs.


Types of Loan Providers

Types of Loan Providers

There are now a variety of ways in which borrowers can get access to loans.


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