10 Solutions To Microfinance Challenges In Nigeria
10 Solutions To Microfinance Challenges In Nigeria. Get Updated On The Challenges Of Microfinance In Nigeria. Check This Post.
Are you looking for the key steps to provide solutions to Microfinance challenges and you have no idea of the steps to take? Do you want to know the different solutions that need to be put in place to be able to make a success of the Microfinance banks solution? Then this article is for you, as we will be giving you 10 solutions to Microfinance challenges in Nigeria.
What Is A Microfinance Bank?
Microfinance banks are the banks that provide financial services to low-income individuals. Microfinance are excluded from traditional banking, they provide credit in the form of small working capital to their customers, offer savings account, and also give insurance and do money transfers as well.
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What Are The Solutions To Microfinance Challenges In Nigeria?
The role of Microfinance banks in Nigeria is a wide one and also huge and as such needs a lot of support to enable them achieve their goals, in this article, we will be giving you some of these solutions to Microfinance challenges in Nigeria;
- Need To Review Interest Rate
- Reduction In Debts
- Provision Of Basic Infrastructure
- Need For Proper Management
- Support From Donor / Investors
- Support From The Government
- Improvement Of Banking Culture In Rural Areas
- Improve Awareness To The People
- Improvement In Capital
- Reduction In Miracle Banks
10 Solutions To Microfinance Challenges In Nigeria
1. Need To Review Interest Rate
This is the first on our list, as it is very important. The Microfinance banks in the country Nigeria needs to review their interesting facilities as compared to commercial banks, as their interest percentage rate needs to be a bit competitive with what is obtainable in other commercial banks, thereby bring forth more customers patronizing them.
2. Reduction In Debts
The next step to providing solutions to micro-finance challenges in Nigeria should be reduction in the growing trend of multiple borrowing by clients or customers in microfinance banks. Debts should be well monitored and followed from making them become irreversible debts when they turn out to be so plenty.
3. Provision Of Basic Infrastructure
Third on our list is the provision of basic infrastructure, this is important because one of the problems facing micro-finance banks in Nigeria is the absence of basic infrastructures. These infrastructures include provision of water and electricity, even good roads mostly in rural areas, as good roads in rural areas will improve the easy reach to micro-finance banks, therefore improving the progress of micro-finance banks in Nigeria.
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4. Need For Proper Management
Most microfinance banks managers and some other staffs misuse the funds at their disposal, some buying exotic cars, renting extravagant homes and the rest, all of these will only breed chaos and problems in the system and the society at large. The progress of the microfinance banks start with those in the management, once they get it right, the rest will follow suit.
5. Support From Donor / Investors
Investors and donor organizations that can help should partner with the microfinance banks in Nigeria to drigve their main objectives. All of this will raise the standards for microfinance banks in Nigeria. Government should also move ahead to bring in external bodies to help microfinance banks in achieving their aims and especially those in rural areas.
6. Support From The Government
There is need for the government to come to the aid of the micro-finance banks in Nigeria. There should be allocation of a substantial budget and also donations to the microfinance institutions, all of this leading to the economic growth of the country as a whole through the loans that will be allocated to the poor for business.
7. Improvement Of Banking Culture In Rural Areas
You should know that alot of people in the rural areas don’t understand the need to have an account for themselves, so improvement of the banking culture in rural areas will improve the progress of microfinance banks.
8. Improve Awareness To The People
So many people have no idea about microfinance banks and the need to have an account with them, so with the improvement in awareness, there will be more people coming into the fold and then breeding growth for microfinance institutions.
9. Improvement In Capital
Micro finance will be able to fully compete with commercial banks if their capital are adequate enough to pass round to customers who need to get loans from them. This Capital can be improved if there are qualitable donors and support from external sources and even the government, like we had earlier discuss.
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10. Reduction In Miracle Banks
This is the last on our list, major problems facing microfinance as a whole is the wide spread of miracle and magical banks, who come out of no where and promise individuals unreal interests, most of these banks are fraudulent too, so one solution is to reduce and take off these banks from the society, as most of these magic banks are taking away micro-finance customers and this is a challenge to microfinance.
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