NIGERIA and MICROFINANCING: A PRESENTATION AT THE 5TH NIGERIA GERMAN BUSINESS GROUP CONFERENCE IN DUSSELDORF GERMANY

1. IFEOMA ANA-ELIM MICROFINANCE BANK NIGERIA NIGERIA and MICROFINANCING: A PRESENTATION AT THE 5TH NIGERIA GERMAN BUSINESS GROUP CONFERENCE IN DUSSELDORF GERMANY ON 6TH SEPTEMBER 2008 BY IFEOMA C. ANA (ACA, ACIB, MBA, ACIP) MD/CEO ELIM M MFB LAGOS NIGERIA and PRESIDENT, (WIBAFIN)

2. IFEOMA ANA-ELIM MICROFINANCE BANK NIGERIA DEVELOPMENTAL STAGES IN NIGERIA MICROFINANCING In the next few slides, I would trace the history of micro financing from 1977 to date to demonstrate the institutionalisation of microfinance banking in Nigeria, discuss the opportunities as well as treats of micro financing in Nigeria and conclude by introducing you to my microfinance bank; ELIM MFB. It must however be noted that even from the medieval times, like many other countries, informal thrift activities and informal lending groups had existed in Nigeria. These activities have again passed through various stages including trading farm seeds for farm lands, borrowing of crops in in some seasons to be returned in other seasons, rotational savings and loans which are still quite prevalent today in most villages, market places, churches and mosque association as well as corporate in offices

3. IFEOMA ANA-ELIM MICROFINANCE BANK NIGERIA History of Nigerian microfinance The developmental stages

4. IFEOMA ANA-ELIM MICROFINANCE BANK NIGERIA Governmental initiatives on microfinance provision

5. IFEOMA ANA-ELIM MICROFINANCE BANK NIGERIA Government initiatives cont

6. IFEOMA ANA-ELIM MICROFINANCE BANK NIGERIA REASONS FOR FAILURE OF PAST INITIATIVES Lack of adequate skills by the operators to deliver services effectively. Unwillingness of conventional banks to support micro enterprises. Paucity of loanable funds. Absence of support institutions in the sector. Incompetent management, poor corporate governance, insider abuse, weak internal controls, poor credit administration and poor asset quality. Low management capacity of clients.

7. IFEOMA ANA-ELIM MICROFINANCE BANK NIGERIA THE NEW BEGINNING: MICROFINANCE POLICY, REGULATORY & SUPERVISORY FRAMEWORK 2005 Since Nigeria�s participation in the International Conference on Microfinance which took place in 2000, Some Economic Reforms have been undertaken and still on-going which directly or indirectly impact on micro financing. Some of these reforms are: National Economic Empowerment & Development Strategy (NEEDS) Pension Reform; Privatization and commercialization of Telecommunications activities Power sector Reform; Greater Anti-corruption campaign;

8. IFEOMA ANA-ELIM MICROFINANCE BANK NIGERIA New Beginning cont�d The Financial Services Sector in Nigeria perhaps underwent the biggest reforms. Some of these reforms resulted in: Consolidation of Banks; Currency Restructuring; Payment System Reforms; Better Reserve Management; Constructive Foreign Exchange Management; Review of Banking Regulation (BOFIA of 1991) s) and Microfinance Policy institution.

9. IFEOMA ANA-ELIM MICROFINANCE BANK NIGERIA THE Microfinance policy In order to address the poverty situation in the country, streamline services delivery to the Poor and Small and Medium scale entrepreneurs as well as provide sustainable finance services to micro entrepreneurs, the Microfinance Policy, Regulatory and Supervisory Framework was launched on December 15, 2005 by the President of the Federal Republic of Nigeria and Commander-In-Chief of the Armed Forces, Chief Olusegun Obasanjo (GCFR). The Policy: Provides for the setting up of private sector driven microfinance banks (MFBs) to provide financial services for poor and low income groups.

10. IFEOMA ANA-ELIM MICROFINANCE BANK NIGERIA POLICY OBJECTIVES The specific objectives of the Policy include to: Enhance service delivery by microfinance institutions to micro small and medium enterprises (MSMEs); Contribute to rural transformation; Make financial services accessible to a large segment of the potentially productive Nigerian population which otherwise would have little or no access to financial services; Promote synergy and mainstreaming of the informal sub-sector into the national financial system; Promote linkage programs between universal/development banks, specialized institutions and microfinance banks; Reduce unemployment; thereby enhance reduction in social ills and Enhance the implementation of the National Economic Empowerment and Development Strategy (NEEDS).

11. IFEOMA ANA-ELIM MICROFINANCE BANK NIGERIA POLICY TARGETS Cover the majority of the poor but economically active population by 2020; Increase the share of micro credit as a percentage of total credit to the economy from 0.9 percent in 2005 to at least 20 percent in 2020; Increase the share of micro credit as a percentage of GDP from 0.2 percent in 2005 to at least 5 percent in 2020; Promote the participation of at least two-thirds of state and local governments in micro credit financing by 2015; Improve women�s access to financial services by 5% annually; and Increase the number of linkages among universal banks, development banks, specialized finance institutions and microfinance banks by 10% annually.

12. IFEOMA ANA-ELIM MICROFINANCE BANK NIGERIA REGULATORY FRAME WORK MICROFINANCE REGULATORY GUIDELINE 2005- in depth supervision of microfinance banks activities by the CBN NDIC INSURANCE- 50% insurance cover for MFB�s depositors compared with commercial banks FEDERAL, STATE AND LOCAL GOVERNMENT INVOLVEMENT IN POVERTY ALLEVIATION- hence the launch of microfunds POLICY IMPLEMENTATION- by ensuring strick compliance before licensing an MFB and that returns are rendered as and when due to CBN including baking examinations

13. IFEOMA ANA-ELIM MICROFINANCE BANK NIGERIA MICROFINANCE MARKET MARKET DEPTH- over 60 million Nigerians, more than 10 million micro enterprises and over 2 million SMEs, anticipated 30 trillion Naira (some $2.5 trillion) in the next 10 years DEMOGRAPHIC SPREAD- better appreciated in the south, while the north is hardly catching the flame. The South West has more enlightened operators, but the south east has the higher clientele base GENDER ISSUES-men more forthcoming, women hindered by social and cultural barriers both as clients and operators, therefore a male dominated market for now. We are working hard to change this status quo BUY IN BY STAKE HOLDERS- more the low income and semi and unemployed bankers and financiers, NGO�s more into social aspects personalised activities, religious organisations have great interest but the elites generally shun the microfinance activities

14. IFEOMA ANA-ELIM MICROFINANCE BANK NIGERIA PARTIES TO MICRO FINANCE IN NIGERIA PRIVATE INVESTORS NGO�s INCLUDING RELIGIOUS BODIES REGISTERED AND UNRESGISTERED MFI�s GOVERNMENTAL AGENCIES MICROFINANCE BANKS COMMERCIAL BANKS COMMERCIAL BANKS THAT HAVE LICENCE FOR MICROFINANCE BANKING INTERNATIONAL FUNDING AGENCIES REGULATORS-NDIC AND CBN THE CLIENTS

15. IFEOMA ANA-ELIM MICROFINANCE BANK NIGERIA PROSPECTS POSIBILITY OF HIGH and ACCELERATED GROWTH Social ills reduction Real sector development Rural-urban migration checking Monoproduct dependency stemming Gender bending and women emancipation Inprovement in per capita income and living standards Condusive environment for brethren in diaspora and expatriates to invest and to return home/do business in nigeria Financial independence for greater number of people Positive impact in democracy Positive global image for our country

16. IFEOMA ANA-ELIM MICROFINANCE BANK NIGERIA TREATS THE RICH CONTINUED SNOB OVER REGULATION OVER INVOLMENT OF GOVERNMENT UNPROTECTED YOUNG INDUSTRY DEARTH OF OPERATIONAL CAPACITY MIS-UNDERSTOOD MISSION AND DICOTOMY OF OPERATORS BY THE INTERNATIONAL FUNDING ADENCIES INADEQUATE FUNDING FOR SUSTAINABILITY UNDUE COMPETITION FROM THE MEGA BANKS APATHY FROM WOULD BE CLIENTS BECAUSE OF HIGH RATES FROM UNFUNDED MFB�S AN UN-EDUCATED POPULACE IN THE GAINS OF MICROFINANCING

17. IFEOMA ANA-ELIM MICROFINANCE BANK NIGERIA WAY FORWARD TOTAL INVOLMENT BY ALL STAKE HOLDERS: THE CLIENTS NIGERIANS IN THE DIASPORA INTERNATIONAL COMMUNITIES MICROFINANCE PRACTIONERS THE REGULATORS THE GOVERNMENT The insolvents of practitioners must be double edged i.e SOCIAL AND FINANCIAL OBJECTIVES to make for sustainability and growth

18. IFEOMA ANA-ELIM MICROFINANCE BANK NIGERIA INTRODUCING ELIM MICROFINANCE BANK Permit me 3 minutes to introduce to you, the microfinance bank which I manage called ELIM MICROFINANCE BANK and 5 Captive products of the bank totally aimed at changing the face of poverty in Nigeria: ELIM KIT �n� KIN GRADUATE ENTREPRENEURSHIP SCHEME ELIM BOUNDLESS WOMAN ELIM MICRO-PRO ELIM COTTAGE INDUSTRY

19. IFEOMA ANA-ELIM MICROFINANCE BANK NIGERIA THANK YOU FOR YOUR ATTENTION THANKS AND