Empowering the poor- Salu Ayoola

According to my experience ,over 50% of the active population in Nigeria remain unserved by the formal financial institutions.The bulk of these people belong to the poor and impoverish society.Yet the poor engage in economic activities that lend themselves to financing .Where such activities are supported,the impact on individuals, families and society can be dramatic.
Average incomes of this class can be increased by as much as 100% and about 50% of households moved out of poverty.
MICROFINANCE IS THE ANSWER
For this scheme to be successful, focus must be on rural communities, low income earners and enterprising unemployed youths and deal in high volumes by granting very small loans to millions of customers with the aim of reaching a certain percentage of the down trodden in Nigeria
Microfinance should also focus on a particular demographic- women.In Nigeria women are in 80% of petty trading.While neglecting the small scale entrepreneur less than 40yrs of age
Groupings or cooperative societies should be encouraged with revolving credits for members.Members within the group serves as guarantors for one another, so if one member cannot pay the others will make up the difference,in this way members are held accountable for each other.
Minimal interests rates, sheer volume of customers and their excellent repayment rate makes it worthwhile and viable
Worthy of mention is LAPO microfinance
Indonesia, Bolivia,Columbia,India are currently using this approach
Microfinance holds the key to transforming Nigeria’s micro economy but as commendable as it is, the purpose will be defeated as it was in the 90’s if micro finance begin to operate as commercial banks
Their modus operandi should be clearly stated and strictly monitored
Unnecessary paperwork and bogus collateral should be avoided.
There should be a limit to the amount that can be given out as loans
Employment will be generated for the populace who will be staff of such banks
This can also serve as vehicle for various intervention programmes like N-power,5000 stipend etc
Churches can use this for worshippers empowerment
I am not APC or PDP but i desire the best for Nigeria
-salu ayoola ph
NB-I was a practitioner in this sector between1992-1996