E-Financial
LAPO Navigates Microfinance through COVID-19

By Edward P. Eze
Microfinance Institutions (MFIs) provide the best access to banking services for the majority of such underprivileged populations whose livelihoods have been worst affected by the pandemic’s disruptions to transportation, customer service, supply etc.
Because these populations generally save little and rely on daily basic income, they are now in greater need of sustainable credit and other pro-poor services that were already provided for them by microfinance institutions before the pandemic hit.
For a country like Nigeria experiencing mass poverty, steep unemployment and other serious socio-economic challenges, the implications are dire.
It means that millions of poor citizens amongst the 40 percent of the population will find it difficult to get back on their feet without the sort of services and support that MFIs provide. It goes without saying that the effectiveness of Nigeria’s MFIs will be critical to rebuilding the economy.
One of the major players in Nigeria’s Microfinance sector is LAPO Microfinance Bank which has an extensive network of branches across the country and accounts for over 27 percent of the Microfinance (MFB) sector.
LAPO MFB’s ubiquitous presence across the country as well as its pro-poor and solid corporate reputation established over nearly four decades have made it the country’s preeminent MFB.
In fact, due to its popularity many Nigerians in the lower socio-economic groups use ‘LAPO’ as a generic name for all microfinance banks, the same way “Omo” has become a synonym for detergents and “Bournvita” used to be for cocoa beverages.
LAPO MFB has approached the challenges of the pandemic with its trademark rigour and thoroughness.
It has made significant strides amidst the historic disruptions brought on by the pandemic whiche emerged in the country just over a year ago.
It has sustained its support to low-income earners, even recording a total disbursement of N12.2 billion as loans to 152,446 rural farmers and owners of Small and Medium Scale Enterprises (SMEs) in 2020.
Announcing these milestones recently, Dr Honestus Obadiora, LAPO’s Acting Executive Director, said the loans were disbursed in 253 branches across 21 states. “We were able to achieve this in spite of the pandemic and we are committed to sustaining this financial support through our development plan to open more branches and reach more clients,” Obadiora said.
The N12.2 billion disbursement represents a 12 percent increase compared to N10.9 billion disbursed in 2019 with portfolio at risk standing at 18.62 percent.
LAPO MFB has recorded other notable achievements during the pandemic including the launch in February, 2020 of its second bond, a N6 billion fixed rate bond which within five months was already oversubscribed by N200m.
However, even with such stellar achievements, LAPO like other MFIs is weathering significant challenges due to the pandemic.
A survey by the Consultative Group to Assist the Poor (CGAP), a global partnership of more than 30 leading development organizations that works to advance the lives of poor people through financial inclusion, shows that microfinance institutions (MFIs) are dealing with rising ‘bad debts,’ which now account for up to 30% of their total loans.
The survey, conducted with the SME Forum, also shows that there is now a higher rate of defaults in loan repayments because of widespread business failures and even outright closures due to the pandemic.
This is a major issue because most MFIs operate with little savings, expecting that small loans will be repaid in a timely fashion and with a low default rate. The fallout of increasing defaults due to the pandemic is that MFIs in turn face challenges repaying banks and their investors.
As a result, the network of trust that is so vital to MFIs is threatened as investors are becoming more cautious about which MFIs they lend money to.
However, reports say majority of MFIs remain reasonably sound financially and widespread bankruptcies are not expected at this time. In the case of LAPO, positive developments such as the enthusiastic response to the recent launch of its bond signal bright prospects for its long-term health.
It is also noteworthy that the pandemic disrupted business operations of many MFIs considerably.
Like its counterparts, LAPO has had to alter physical and onsite operations especially at the start of the pandemic.
The bank demonstrated commendable foresight by closing down its on-site operations across Nigeria on Wednesday, March 25, 2020, ahead of the Government’s lockdown directives for Lagos, Ogun and the Federal Capital Territory.
proactive measure to ensure the safety of customers and staff is in line with LAPO’s well-known reputation for championing public health through investment and public enlightenment.
Interestingly, in a seeming foreshadowing of the pandemic a few months before it began, LAPO played an active role in promoting hygiene through hand washing on World Hand-washing Day, October 15, 2019.
The organization donated items to schools to create awareness about the importance of hand-washing which would turn out to be essential in the fight against Covid-19.
While the pandemic persists, MFIs continue to face challenges meeting physically, communicating, and collecting loan repayments from their clients. International industry experts believe that now more than ever, the value of digital financial channels such as agent networks, e-wallets and mobile banking are vital because these technologies allow for continuity of service and spare customers the risk and inconvenience of travelling to branches as well as protect staff of the MFIs.
LAPO is in a good position to embrace such recommendations to further digitize operations because of its already existing culture of technological innovation.
For instance, in February 2020, LAPO announced plans to implement Oracle’s Flexcube, a budding automated banking software that already powers more than 10 percent of the world’s consumer bank accounts.
The preeminent microfinance bank appreciates that effective digitization must take into account the reality that majority of customers don’t have reliable access to technology.
This is a key component of the conscientiousness required as MFIs navigate the realities of the pandemic and continue to support the poorest segments of the population.
Finally, robust policy support by government is required to assist MFIs maintain asset quality so that they can continue to give out new loans to low-income households or MSMEs as an empowerment and poverty fighting measure.
It is therefore critical for policy makers to make necessary adjustment to extant laws and regulations to achieve this vital objective in order to stave off deepening inequality and poverty to give those at the bottom of the ladder a life line at this very challenging time for the local and global economies.
*Eze is a policy analyst based in Lagos.
E-Financial
NIBBS: Banks Close 29.4m Accounts, Dormant Accounts Hit 33.39m

Banks in Nigeria closed 29.4 million accounts as of March 2025, according to the latest report by the Nigerian Interbank Settlement System (NIBSS).
The figure represents a sharp year-on-year increase of 30.43 per cent from the 22.54 million closed accounts recorded in March 2024.
It also reflects a steady rise in account closures over recent months, with 33.29 million closed accounts reported in February 2025 and 29.43 million in January.
The report also revealed a significant increase in dormant accounts, which surged to 33.39 million in March 2025, up from 19.79 million in the same period in 2024, a 71.3 per cent rise in inactive accounts over the past year.
Despite the spike in closures and dormant accounts, the number of active bank accounts rose from 219.64 million in March 2024 to 320.05 million in March 2025, representing an increase of over 100 million, or 45.7 per cent.
NIBSS defines a dormant account as one that has seen no deposit, withdrawal, transfer, or point-of-sale transaction for a period of six months.
The surge in account closures and dormancy follows the Central Bank of Nigeria’s directive issued in December 2023, mandating commercial banks to restrict Tier-1 accounts not linked to a Bank Verification Number (BVN) and National Identification Number (NIN) by March 1, 2024.
In response to the directive, BVN enrolment increased from 61.6 million in April 2024 to 66.23 million by July 2025, as more Nigerians rushed to meet the CBN’s compliance deadline.
E-Financial
Cardoso, CBN Boss Risks Arrest over Alleged N5.2 Trillion Unremitted Funds

The Joint Committee of the House of Representatives on Public Accounts and Public Assets has threatened to issue a warrant of arrest against Mr. Olayemi Cardoso, governor of the Central Bank of Nigeria (CBN), over repeated failure to honour its invitations regarding the probe into non-compliance with the Fiscal Responsibility Act 2007 and Finance Act 2020.

Olayemi Cardoso,, Gov, CBN
In a joint statement released on Friday and signed by Hon. Bamidele Salam and Hon. Ademorin Kuye, chairmen of the committees, the lawmakers decried the CBN governor’s continued disregard for legislative summons.
The committee is investigating the non-remittance of operating surplus as well as the mismanagement of unclaimed dividends and dormant account balances.
According to the committee, the Office of the Auditor General for the Federation reported a liability of N5.2 trillion in unremitted operating surplus due to the federal government from 2016 to 2022; a claim corroborated by the Fiscal Responsibility Commission in a separate submission to the National Assembly.
The committee cited provisions of the Finance Act 2020, which mandate that unclaimed dividends from publicly listed companies and dormant bank account balances older than six years be transferred into the Unclaimed Fund Trust Fund. The fund is to be managed by a Governing Council led by the Minister of Finance and the Debt Management Office (DMO).
Contrary to this, the CBN maintains that the Financial Institutions Act 2020 empowers it to manage dormant balances.
However, the committee noted that the Attorney General of the Federation has issued a legal opinion affirming that the Finance Act 2020 remains the valid law guiding the management of such funds.
Following extensive submissions, the committee resolved that the CBN must remit N3.64 trillion, representing 70% of the undisputed N5.2 trillion operating surplus, within 14 days from receipt of its June 27, 2025, directive, pending final reconciliation of the disputed amount.
Additionally, the apex bank was directed to submit a detailed report on the total sum of unclaimed dividends and dormant account balances by June 30, 2025.
The CBN was also ordered to transfer these funds into the Unclaimed Fund Trust Fund within 14 days and furnish the House with evidence of the transaction.
The lawmakers expressed frustration that, despite the clear directives and ample time, the CBN governor has failed to respond or appear before the joint committee to provide an explanation.
“In view of this continued defiance, the Committee will be compelled to exercise its constitutional powers to compel Mr. Olayemi Cardoso to appear before it,” the statement warned.
E-Financial
Moody’s Upgrades Ecobank’s Outlook to Stable

Moody’s has upgraded the outlook on Ecobank Transnational Incorporated’s long-term issuer and senior unsecured debt ratings to stable from negative.
In the latest rating commentary, made available to media on Thursday, Moody’s also affirmed the pan-African banking group’s B3/Not Prime long- and short-term issuer ratings; B3 senior unsecured debt rating; b2 notional Baseline Credit Assessment and b1 Adjusted BCA.
ETI’s subsidiaries operate across 38 countries, including 35 African countries, and total assets of $28.9bn as of March 2025, details from the rating note highlighted. Moody’s said the decision to change the outlook to stable on the long-term issuer and senior unsecured ratings reflects ETI’s resilient financial performance.
The rating upgrade also takes into consideration higher dividends being upstreamed to ETI, resulting in lower double leverage and reduced refinancing risk.
The rating adjustment also reflects an expectation that the recapitalisation process of Ecobank Nigeria Limited will be completed by the end of 2025, with limited impact on the group’s financial fundamentals.
“The stable outlook also captures our expectation that a series of capital-boosting initiatives and actions to cure Ecobank Nigeria’s total capital position will be completed before the end of 2025”, according to the ratings agency.
In May 2025, ETI received shareholder approval to raise $250 million in Additional Tier 1 (AT1) capital and announced the launch of the transaction effective 9 July 2025, of which a portion is expected to be downstreamed to Ecobank Nigeria as AT1 capital during Q3 2025.
Ecobank Nigeria’s plan to raise $200m in AT1 capital was noted in the rating note. The ratings analysts said they consider
“We also note that Ecobank Nigeria’s recent successful offer to tender $150m of its February 2026 $300 million notes and consent to remove the capital adequacy ratio covenant from this bond’s terms alleviates risks of an event of default in Nigeria that would trigger cross default at the ETI level. Over the past year, ETI has shown resilience in its financial performance, which supports our change in outlook to stable. Liquidity risks are being moderated by the group’s gradually improving profitability during 2024 and Q1-2025.
“This has translated into a 22 per cent increase in dividends upstreamed to ETI during 2024, these being received from 22 dividend-paying subsidiaries compared to just 14 in 2021,” the rating commentary revealed.
In turn, albeit high, ETI’s double leverage ratio, which measures the liquidity risk taken on by the holding company, as a result of it borrowing in order to invest in the equity of its subsidiaries, has eased to 168 per cent as of December 2024 from 173 per cent in 2023.
Additionally, the stable outlook reflects reduced liquidity risk at the holding company level with the refinancing of short-term liabilities in 2024 with longer-term funding.
Moody’s said this is underpinned by demonstrated market access, notably through senior unsecured notes issuance of $400m in October 2024 and a tap increase of $125m in May 2025, maturing in October 2029.
ETI’s B3 long-term issuer ratings affirmation reflects the affirmation of the group’s b2 notional BCA; the affirmation of the group’s b1 adjusted BCA as captured by a one-notch uplift for affiliate support, reflecting Moody’s assessment of a moderate probability that the firm’s major institutional shareholders would extend support to the group. Moody’s said asset quality for the group has improved over recent years.
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