Microfinance Banking

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Microfinance Banking

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A presentationby Segun AdajuDeputy
Managing Director/COOIntegrated Microfinance
Bank LimitedatNECAs Network of
Entrepreneurial Women (NNEW)General
MeetingLagos Sheraton Hotel and Towers,
IkejaFebruary 28, 2007

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Preamble

• Growth Vs Development

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Posers

• Total theft and wastages in Nigeria since
  independence is about 400 billion
• - World Bank/EFCC Statistics

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Posers

• Current foreign reserves is in excess of 40
  billion
• - CBN Statistics

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Posers

• Nigeria is 13th largest oil producer in the world
  with 32 billion barrels of oil reserve, enough
  for 37 years
• - CBN Statistics

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Yet

• Over 75 of Nigerians live below 1 (N140) per
  day!
• - World Bank Statistics

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Still Yet
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Posers

• Why the WIDE disparity between figures and
  reality?

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Posers

• The difference between growth and development

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Posers

• and sustainable Human Development

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The ONLY Promising Solution

• MICROFINANCE BANKING

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What is Microfinance?

• Microfinance is about providing financial
  services to the poor, unbanked and entrepreneurs
  who are traditionally not served by the
  conventional financial institutions

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What is Microfinance?

• Micro savings
• Micro loans
• Micro insurance
• Payment transfer
• Capacity building

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What is Microfinance?

• What is a Micro loan?
• Amount smaller in amount than typical business
  loan
• Tenor shorter and depends on clients cash flow
  pattern
• Repayment schedule frequent, sometimes daily,
  weekly or bi-weekly payments.
• Security character and business cash flow.
  Sometimes backed by guarantees.
• Interest rates higher for micro loans or forced
  savings are required.
• Training participation of prospective borrower
  sometimes a prerequisite to receiving credit

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Microfinance Indonesia Example

• Bank Rakyat Indonesia (BRI) one of the worlds
  leading micro finance institutions (MFIs)
• Has 4,049 BRI Unit desas (village banks) with 96
  profitable
• Has staff strength of over 20,000
• As at Sept 2004, BRI had 87 of its loan
  portfolio in micro loan
• More emphasis on savings with deposit/loan ratio
  of 225
• BRI is the largest bank in Indonesia and the most
  profitable and efficient
• Made a PBT of N30b and had a deposit base of
  N400b in YR 2005.
• IPO was successfully oversubscribed 15 times in
  2003

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Bangladesh - The Grameen Bank

• Idea born in 1976 by Prof. Yunus when he loaned
  27 from his pocket to 42 stool-makers, women
• Bank was established in 1983 in Bangladesh
• Today, it has 1,800 branches and works in 42,127
  villages, with a loan portfolio of 4b to 2.6m
  borrowers
• 95 of its 2.6m customers are women!
• Has granted a total of 6.6m microloans.
• As of 2006, Grameen Bank had achieved a 98.84
  repayment rate
• Has made profit every year since inception,
  except 1983, 1991 and 1992.

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Bangladesh - The Grameen Bank

• Started business in 1983. 1991 and 1992 were
  years of massive rehabilitation for members of
  the bank after the devastating cyclone of April
  1991
• Has a staff strength of over 12,000
• Has authorised capital of 11m and s/holders
  funds of 142m
• Has diversified into Telecomm with Grameen
  telephones
• More than 250 institutions in over 100 countries
  operate the Grameen methodology of micro-credit
  programs
• Founder and Grameen Bank won the Nobel Peace
  Prize for Year 2006.

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The Facts

• Nigeria is 13th largest oil producer in the world
  with 32 billion barrels of oil reserve, enough
  for 37 years
• The second largest economy in Africa with annual
  GDP of 71b
• One in every five African is a Nigerian! Yet
• Over 75 of the population live on less than 1
  per day (World Bank Statistics)
• Over 65 of the people are excluded from
  financial services
• Bank outlet/client ratio in rural areas of 1
  57,000
• Only one million of about 60 million clients
  access formal micro finance services (less than
  2)
• Micro credit as a proportion of GDP is 0.2,
  whereas the informal sector accounts for over 70
  of GDP

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The Facts

• Micro credit as a proportion of total credit is
  0.9, whereas total credit of N2.4 trillion as at
  December 2006 was given to ONLY 36,000 borrowers!
• The microfinance market in Nigeria is the largest
  in Africa and third largest, untapped market in
  the world
• According to CBN, 84 of money in circulation
  (currently estimated at N630b as at December
  2006) is outside the formal banking system.
• The market is estimated at 40b (N6 trillion)
  with a potential client base of 60 million
  customers.
• The total assets of all universal banks in
  Nigeria as at December 2006 was is N6.6 trillion
• The formal banking system in Nigeria caters for
  about 20 of the population, mostly in urban areas

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Integrated Micro Finance Bank Ltd

• Our Profile

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Our Vision

• To be the leading micro finance institution in
  Africa.

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Our Mission

• We are committed to create a leading micro
  finance bank in Nigeria that would facilitate
  financial empowerment to the poor and unbanked,
  deliver superior values to stakeholders through a
  highly motivated workforce and efficient
  technology while remaining socially responsible

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Our Payoff

• banking at your doorstep.

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Integrated Micro Finance Bank Ltd

• Promoters S.A S.A Integrated Services Ltd
• Board of Directors
• Dr. Mrs. Doyinsola Abiola - Chairman
• Simon Akinteye - MD/CEO
• Segun Adaju - DMD/COO
• Dr. Jerry Ariomovuohoma, M, IoD
• Babalola Owoeye
• Demilade Adepoju
• Technical partners - ECIAfrica, S.A.
• - World Bank/MSME Project

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Integrated Micro Finance Bank Ltd

• Management Team
• Simon Akinteye BSC, ACA, MBA - MD/CEO
• Segun Adaju BSC, MBA - DMD/COO
• Lawrence Ojebode HND, ACA - GH, Operations
• Coleman Oshadami BSC, ACA - GH, Retail
• Adewale Oyebamiji MBA, ACA, ACTI - GH,
  FINCON/Strategy
• Seyi Olojede HND, ACA - Head, Internal Control
• Chimaobi Agwu BSC, MSC, MBA - Head, Risk Mgt
• Titilayo Osinubi LLB, BL - Head, Legal
  Services/HR
• Tunde Thomas BSC,MBA - Head, Enterprise Banking
• Jennifer Egbujie BSC, MSC - Head Quality Comm.
• Dr. Bimbola Ogunniyi MBDS, MBA - Head, Treasury

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Our Products

• Micro credit
• Working capital loans
• Micro leasing
• Consumer Finance
• Micro savings
• Modified Daily Contributions
• IMFB beneficiary account
• ROSCA account etc
• Micro insurance
• Payment transfers
• 5. Capacity building
• school everywhere, I dey learn

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Our Record

• Total number of accounts opened - 33,426
• Total borrowers - 1,908
• Total deposits - N453m (3.57m)
• Total balance sheet size - N648m (5.1m)
• Total loans disbursed - N362m (2.85m)
• Outstanding as at February 22 - N273m (2.15m)
• Repayment rate - 98.5
• Authorised Share Capital - N500m (3.94m)
• Paid-up Share Capital - N215m (1.7m)
• Staff strength - 501
• Field Offices - 30
• IT Capacity - 4m clients
• Projected Grant (World Bank) - 2m
• Projected Paid-up Capital-Sept 2007 - N1.0b (8m)

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• Thank you for your attention.

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• Questions and comments

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• Integrated Microfinance Bank Ltd
• 64, Adeniyi Jones Avenue
• Ikeja, Lagos
• Tel [phone]
• Email info_at_imfb-bank.com
• Website www.imfb-bank.com