Grants MFB: Our interest rate stands at 3% for salary earners

…4% interest for non-salary earners

By Peter Usman://

Head of loans, Grants Microfinance Bank, MFB, Gwagwalada Area Council in the Federal Capital Territory, FCT, Mr. Obosi Ademoh has revealed that only 3% interest is charged for salary earners seeking for loan, while non-salary earners pay 4% as interest per a month.

Ademoh made this disclosure while speaking to IDEALPOSTS recently in an interview at the 7th annual symposium organised by the Nigerian Microfinance platform in Abuja.

He said the Microfinance Development Funds which was launcehed at the event would go a long way to help Microfinance Banks across the country to access fund each time they have many clients with limited amount to satisfy them.

The Head of loans, Grants MFB, however noted that the only source of fund available to Microfinance banks is the shareholders fund, saying that if the Microfinance Sector Development Fund which was launched commences operation fully, it would serve as another source of fund for the MFB.

“Presently, our only source of fund is the share holder’s fund; that is basically what all the Microfinamce Banks makes use of. We have never gone for borrowing anywhere, but the way things are going, we may need other source of fund to meet the request of our clients.

 “Some times we have many clients without enough funds to disburse, if this initiative actually comes to stay, when managers of Microfince Bank have shortage of fund, they can seek partnership with the MFB Development Funds for assistant so as to enable them satisfy their customers.

“However, in this kind of partnership, conditions will be given by MFB Development Fund on duration of payment and how to pay back the loan for other to benefit from the fund” Ademoh said.

Speaking on the risk involved in giving out loan to categories of account holders of Microfinance banks, Ademoh asserted that the need for bank personnel to do follow up on a daily basis to ensure prompt payment and as at when due cannot be underestimated.

He explained that the risk associated with non-salary account holders is very high compare to those working with steady salary, adding that instead of banks waiting for the end of the month to collect back the loan for non-salary account holders, they usually split the loan into number of days in a month so that it can be paid on daily basis to avoid default.

“In most cases, we always have problem with starters, those going into business for the first time using loan. Such people are like gamblers in the business and if you don’t monitor them well, they may fail in paying back the loan. So we prefer this category of people to pay on daily basis. For those that have been in the business for some times, the risk is very slim. Such customers can pay back on monthly basis.” he said.

Leave a Reply

Your email address will not be published. Required fields are marked *