The Lagos State Government has committed 1.3 billion to the Lagos State Micro-Finance Institution (LASMI) as it seeks to help people in the state utilize emerging opportunities to improve their lives, Nigeria CommunicationsWeek can reveal.
LASMI was established with the primary objective of providing basic financial assistance to entrepreneurs in the rural and urban areas of the state who may not normally be in a position to benefit from the services of the orthodox banking system due to their inability to provide collateral or security.
Sikiru Alabi-Macfoy, executive chairman, LASMI said “this is a continuous process designed to alleviate poverty which unfortunately is not created by the poor but the system.” He added that Lagos State had taken the initiative through partnership with microfinance banks to put in motion a system that would eradicate poverty in the State.
The Microfinance Banks are Integrated Microfinance Bank, GapBridge Microfinance Bank, Mic Microfinance Bank, LASU Microfinance Bank, Ojokoro Microfinance Bank, Infinity Microfinance Bank, GS Microfinance bank and Townserve Microfinance Bank.
“So far, Lagos State has disbursed over N1.3 billion through microfinance banks in Nigeria and will inject more so that more people can benefit,” Macfoy said.
Nigeria CommunicationsWeek gathered that the Lagos State Micro-Finance Fund is to provide additional operational funds to interested Microfinance Banks which shall in turn grant loans directly to entrepreneurs in line with guidelines that are put in place from time to time by the Institution (LASMI) towards achieving the poverty alleviation programme of the State.
According to Enhancing Financial Innovation and Access, EfInA, “Only 5 percent of SMEs have access to a loan, and 59 percent report difficulties accessing financial services”.
The report identified demand for collateral, high interest rates charged by banks, unpleasant experiences of relatives and friends who have borrowed money but later did not pay up and ended up losing property or being arrested, unfavourable repayment terms as barriers to obtaining loans by the active poor.
LASG Commits 1.3 Bn to MFB
