Although not exactly the opposite, we can say microfinance banks to be the flip side of commercial banks. In industry terms, they provide banking services to the “unbankable”. Microfinance banks like Nirsal Microfinance Bank are the answer to the cry and complaints of many paper works and protocols used by commercial banks. Their processes are much easier and straightforward, which is why medium to low-income earners prefer them.
Microfinance banks or microcredit is a financial institution that provides banking to the low-income to middle-class citizens. Without microfinance banks, such individuals would not normally have access to the benefits of a bank. Asides the obvious help it renders, the goal of a microfinance bank is to offer an opportunity to its customer to become self-sufficient. We have the National Microfinance bank that caters for the needs of Nigerians.
On the other hand, the total functions offered by a microfinance bank may vary from one institution to another. However, their primary goal remains the same. The general functions of microfinance banks include deposits, payment services, loans, insurance, and money transfers.
Some of the benefits of using a microfinance bank in Nigeria are:
There are certain financial and structural requirements that you must meet before getting approval from the CBN to start up a microfinance bank in Nigeria. These requirements vary depending on the focus region that your bank intends to cover.
The three categories available for microfinance banks in Nigeria are:
After sorting out your category, you would need to write an application to the governor of the Central Bank of Nigeria. Along with this list, you are required to submit the following:
There are currently close to 1000 CBN approved microfinance banks in Nigeria. To browse through their full list, you can visit the CBN official website at www.cbn.gov.ng/supervision/Inst-MF.asp.
However, some popular microfinance banks in Nigeria are:
(Could include the names of all the previous microfinance banks that we have written on)
Microfinance banks are a very important block for building the country’s economy. Their services and appeal to the unbankable, ensures that a majority of the citizens are covered, and afforded investment opportunities. In general, Microfinance banks help the country grow on a micro-scale which is why it is largely encouraged by the government today.