There is an indication that the Central Bank of Nigeria, CBN would be implementing the Global Standing Instruction, GSI in the Microfinance Bank, MfB Sub sector to boost their loan repayment efforts.
The GSI is a policy that allows a bank to debit the accounts of loan holders in other banks to settle defaults.
Managing Director/Chief Executive of LAPO MfB, Cynthia Ikponmwosa, revealed this in an interview where she spoke on efforts made towards loan recovery in the industry, as well as the impact of the recently commissioned LAPO Place in Maryland in Lagos on the Microfinance space in Nigeria.
She hinted that the edifice would further reassure customers and potential customers that LAPO MfB has not just come to stay but available in terms of receiving deposits from customers beyond giving out loans.
Ikponmwosa said: “Default in loan repayment is a general thing in the sector; I say this because 2023 was a peculiar year on its own. Generally, the regulator is trying to help MfB operators with loan repayment; there is the issue of Global Standing Instruction which the regulators would be implementing soon within the MfB space.
“That has been done in the commercial banks already; we believe that when they introduce that, it would help. There is also the credit risk management framework which the regulators have done; all of these would help in loan repayment.
“They know we operate in a very vulnerable sector and it is important to find a way that even if we are lending to the vulnerable sector, we should be able to hold them accountable to repay. It is a general thing in the sector it is not peculiar to us alone, we would keep reviewing our credit risk management framework to ensure that we lend better and we recover.
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