NIRSAL MFB waives business plans as mandatory requirement
The NIRSAL Microfinance Bank (NMFB) has resolved that business plan is nolonger mandatory requirement and third party provision is also nolonger compulsory.
The NIRSAL Managing Director (MD), Mr Abubakar Kure, announced this, in Abuja, this afternoon, at a press conference, jointly addressed with the Director of Corporate Communications, of the Central Bank of Nigeria (CBN), Mr Isaac Okoroafor.
The NIRSAL MD said the decision to waive Business Plans, become necessary following the controversy generated by some applicants over the Business Plans fees paid to a third party.
Mr Kure said, “In order to stem further controversy, the management of NIRSAL MFB has resolved that the Business Plan is no longer a mandatory requirement and a third party provision of a Business Plan is no longer compulsory.”
CBN governor, Mr Godwin Emefiele, had, recently, announced a N50 billion COVID-19 Intervention Fund as a Targeted Credit Facility, a stimulus package to support households and Micro, Small and Medium Enterprises (MSMEs) to cushion the effects of the pandemic.
CBN mandated NIRSAL MFB owned by the Bankers’ Committee (75 per cent), the CBN-funded Nigerian Incentive Risk-Sharing System for Agricultural Lending NIRSAL, 15 per cent and Nigerian Postal Service (10 per cent) , to disburse the funds. The process was already underway, with individual and corporate loan applications hitting over 80, 000, according to the MD.
However, the process got enmeshed in a controversy over the Business Plans’ fees, as complainants alleged it was a rip-off since the loan application was supposed to be free.
Why we involved third party on Business Plans ― MD
The NIRSAL MFB boss told journalists, that the organization decided to involve a third party in the Business Plan aspect of the loan application process because of the poor quality Business plans being submitted by most applicants.
His words, “The issue of a Business Plan was a requirement for the SME applications as stipulated by the CBN guideline.“At the start of the process, business plans which the NMFB received from loan applicants were highly substandard and to ensure a high standard and efficient processing, an optional, automated Business Plan was provided by a service provider at a highly discounted fee to avoid applicants being charged excessively by other consultants.“In addition, to help people during the stay-at-home period and to make the application process easy, we got a third-party service provider to enable applicants access the Business Plan through the internet”
Mr Kure said that the decision to waive Business Plan as a mandatory requirement, notwithstanding, those who submit such plans along with their applications would assist the bank in quickly processing their applications.
The NIRSAL MD said that templates had been developed to ensure that all loans given out were repaid, as according to him, “Business Plan is supposed to be a fundamental part of this process, but because of the circumstances in which we are, we have developed a templates, essentially we are going to be using the bank statements to determine the cash flows and that will assist us in our assessment.“We don’t want to make Business Plan mandatory any longer because of the associated cost but anyone who is a serious businessman should know that you can’t take N25 million without saying how you will payback. Those who are genuine business should come forward but those who think that it a grant should keep away.”
CBN ‘ll push on with the programme ― Okoroafor
In his remarks, Mr Okoroafor said that NIRSAL MFB had been given a mandate to deliver on a programme to ensure that the structure of the economy was changed by making Nigerian producers and not just consumers. NIRSAL MFB was a product of that movement.
He said: “Nobody anticipated COVID-19. When it came CBN, in collaboration with the Bankers’ Committee came up with another programme. We rolled out another programme to make sure that people have access to funds.“Apart from easing off pressure on those who borrowed, CBN specifically set up this fund and mandated to quickly roll out the process to make sure that Nigerian and Businesses get the kind of relief they need to stand this wave.“But instead of making sure that this good intention is realized, some people have gone on to get into all kinds of negative reports to shoot it down.
“I am assuring you that the CBN is resolved to push on with this programme to help our households, our businesses. But they have to be a process. If somebody is supposed to produce a business plan and are unable to produce one, they could be helped. But we said no extra fees
“80, 000 applications have been received and we are processing them, so that our people can be quickly helped. This kind of negative report is a distraction, our people, our suffering. Our people are endangered by this COVID-19, just other people across the world. And every country is they their utmost best to ensure that their people get some relief to enable them stay out this virus.
“I appeal to the media and members of the public that a little patience and a little encouragement would help NIRSAL MFB to go ahead with this a carry out this mandate successfully.”
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