Some operators of microfinance banks in Lagos on Monday said business did not boom as usual as sellers and buyers withdrew in doors days to Presidential/National Assembly polls fearing that violence would break out. According to them, the situation affected loan recovery rate of microfinance banks.
Investigations revealed that some traders who collected loans from banks could not meet instalment repayments and that Portfolio at Risk (PAR) of the banks had shot up.
The operators told the News Agency of Nigeria (NAN) that this was because some traders in Lagos and other parts of the country closed shops due to the uncertainties over the outcome of the polls.
Confirming this, the Managing Director of Bosak Microfinance Bank, Lagos, Mr Kola Bello, said the uncertainties made traders not to trade as usual.
“Anytime our recovery team goes out for loan recovery, they always meet our clients’ shops locked up; this has shot up the PAR of the bank.
“Uncertainties of polls affected most of the entrepreneurs we gave loans; they put their shops under locks and keys.
“Some of them that even opened shops closed early over fear of the unknown.
“For the better part of previous and last week, we could not access our customers to recover part of the loans.
“Our PAR is up now, but as soon as the atmosphere is clear, we will step up our loan recovery rate. Our business will remain stable.”
Mr. Chris Omofoma, the Managing Director of Uromi Microfinance Bank, Edo, said the low repayment was not caused solely by the polls.
He said there had always been low repayment before polls.
“The recent economic downturn made our customers to keep little change left on them; the fear of the unknown grabbed them
“Fire out breaks in some markets recently affected some of our customers.
“All these factors, apart from the uncertainties at polls, shot up our PAR, but we are so confident of combating this, because this industry is vital to the development of this nation. “
The Managing Director of Cowries Microfinance Bank in Lagos confirmed the development.
“To an extent, this is true, but we thank God things are back to shape. So, we are embarking on aggressive debt recovery”, he said. (NAN)
The former President of National Association of Microfinance Bank (NAMB), said business wasn’t usual at the period.
Umeh, who is also the Chairman of Enugu Microfinance Bank, Enugu State, said some of bank officials avoided coming to work because of the fear of the unknown.
“The loan recovery officers weren’t on ground to perform their duties and traders couldn’t leave their shops”, he said.
“This also raised the banks PR up, but the bank is still very vibrant,” he said.
Mrs. Clara Oloniniyi, the Chairperson of Lagos NAMB, urged banks to go back to their businesses as usual.
“I advise my colleagues to get back to the task, on the core business of micro financing since researches and experiences have shown that the sector would be buoyant.
“Researches put it that when growth rate in the macro economy is slowing down, the growth at the micro economic level can be relatively stable.
“This is because people will meet the basic needs of life before saving and engaging in any other luxury”, she said (NAN)

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