1

TOPIC FOR DISCUSSION DEVELOPMENT AND STRENGTHENING MEMBER BASED MICROFINANCE INTITUTIONS Under these topics, the group focused on three (3) issues: Improvement in the policy, legal and institutional framework of cooperatives. Developing and strengthening of rural MFIs and their apex organizations Promotion of a linkage programme to test the credit delivery system 2

Issues 1&2: Current status of Cooperative policy and what need to be done ?  The existing Cooperative policies should be reviewed.  There should be a unification of Cooperative law across the country.  That the level of awareness of the policies is very low.  Most of the MFIs do not register properly, if at all they register.  Enough publicity should be given to the policies and legal issues involved in registering microfinance institutions  That the legal issues binding the MFIs should be improved upon. 3

Issue 3: Areas of Conflict between old and new policies and legal documents  The documents between the old and new were not presented to the Group for deliberation 4

Some of the Challenges identified in transforming from the old to the new policies are:  capacity building,  record keeping,  unification of the policy,  registration of the MFIs especially in the area of registration fees. Issue 4: Challenges between transforming From old to new Insurance policy 5

Issue 5: Which agency should be responsible for regulation?  For formal institutions the regulatory body is the government.  Government could serve as a linkage between the larger society – for identification, sensitization, mobilization and synchronization at the state level.  The L.G. Council should recognise all unions and societies, while the state remains the regulatory body since they have the capacity for the responsibility. 6

Issue 6: Expected Result of Sub-Components  Improve the micro finance institutions in Nigeria.  Improvement in rural access to credit if all the MFIs are well registered.  Transformation of the rural societies in all aspects socially, culturally, politically, economically.  Rural areas will have access to funds for transportation, job creation, eradication of poverty. 7

Issue 7: TECHNICAL SUPPORT REQD.  Training in areas of accounting, operational procedures, basic book keeping, good governance and management.  Sensitization and creation of awareness to both the formal and informal institutions on latest innovations in the field of Micro Finance.  Exposure and exchange of information among themselves i.e. awareness campaign among the existing MFI and those that have been successful.  Bureaucracy and bottlenecks in registration of MFI should be watered down.  There should be recognition and motivation from RUFIN in the form of cash, identification cards, computers, vehicles, machines. 8

 Infrastructural development in areas of water, storage system, electricity be encouraged.  Storage and preservation facilities.  Technological transfer. 9

Issue 8: Roles of Stakeholders in programme implementation  Stakeholders should ensure proper policy implementation  Advocacy i.e. educating and public enlightenment  Mobilization  Regulation  Monitoring and evaluation  Auditing and funding (technical assistance)  Supervision 10

Issue 9: Proposed amendments for RUFIN  RUFIN should expand their operational network.  RUFIN should go beyond workshops and seminar organisation and focus attention on empowering and capacitating the end users for which the project is intended.  RUFIN should ensure that the incentives reach the end users.  Ensure that Training and stimulus loans should be administered to the end users by RUFIN. 11

Issue 10: Expected Result  To attain a viable Rural Micro Finance Institutions (MFI’s) in the country. 12

TOPIC 2: Developing and Strengthening of Rural MFI’s and their Apex Organizations Issue 1: Best approach for strengthening MFI’s:  Recognising their lapses and working out solutions.  Identification of needs and working on these MFIs through training. 13

Issue 2: Challenges of developing and strengthening Rural MFI’s  Information dissemination  Low literacy level of most MFIs  Payment of Counterpart funds by State Government  Policy continuity guiding MFIs  Infrastructural provisions for MFIs  Ability of stakeholders to adopt to new policy and framework guiding MFIs  Issues of payment of registration fees by various MFIs at the formal and informal sector.  Attitudes of the beneficiaries and other stakeholders to changes. 14

Issue 3: The Roles of Cooperative Colleges and Other Training Services Providers  Step up training programmes to meet the current needs of RUFIN.  Should be involved in supervision to see what is really happening in the field.  Training and Re-training of staff of the college.  Logistics support should be provided for the colleges e.g. computers, library, vehicles, etc.  The colleges should be autonomous and free from government dictations.  The number should be increased to twelve (12) colleges so that at least each geopolitical zone will have two (2) colleges. 15

Issue 4: Rebuilding the existing Apex Group or formation of new Apex Group  Improvement on the already existing MFI’s existing in the country.  Machineries in the Local/State Government should be set up for the existing apexes to carry them along in executing their mandate.  The structure of MFI should be maintained based on the modification of existing rules governing them. 16

Issue 5: Expected Result and Outcome for Strengthening Rural MFI’s  To attain a viable Rural Micro Finance Institutions (MFI’s) in the country. 17

Issue 6: Technical Support Required to achieve the goal of the Sub-components  Technical support in form of vehicles, machines.  Insurance for the MFI’s i.e. their assets and liquidity should be insured (Regulatory).  There should be a proper communication outfit that should be instituted to encourage the development of MFI.  Infrastructural development in areas of water, storage system, electricity be encouraged.  Storage and preservation facilities.  Technological transfer. 18

Issue 7: Roles of Stakeholders  CBN and Federal Department of Cooperatives must play a major role in ensuring that MFI implement the rules guiding cooperatives.  CPMU (RUFIN) must play the major role in ensuring the implementation of these activities.  Unification of State apexes of MFI.  Formation of unions by the societies at the local level, where their constraints and lapses can be identified so as to enable RUFIN mediate in solving their problems. 19

Issue 8: Proposed amendments for RUFIN  RUFIN should encourage the formation of apex groups at the local government level. 20

Issue 9: Expected Result  Well managed, viable cooperative societies will be established.  Many agencies/apexes will be formed. 21

PROMOTION OF A LINKAGE PROGRAMME TO TEST THE CREDIT DELIVERY SYSTEM Issue 1: Lessons learnt from NAPEP Experience  Lack of Accountability and transparency  Linkage with NAPEP should not be for implementation because implementation and execution in NAPEP is bastardized.  NAPEP does not disburse cash directly.  Approach good but implementation poor. 22

Issue 2: What make up an effective credit linkage system  Transparency.  Accountability  Knowledge sharing  Credit system with no bad debt 23

Issue 3: Effective management system recommended for RUFIN  Monitoring  Supervision  Rendition of returns  Timely Annual Reports 24

Issue 4: Recommended Commercial Banks  Skye Bank (former Cooperative Bank)  First Bank  UBA  Afri Bank  Union Bank 25

Issue 5: Technical support required to achieve the goals of the Sub-components  As discussed previously. 26

Issue 6: Roles of stakeholders in policy Implementation  Empowering the stakeholders as already said.  Envelope should be increased. 27

Issue 7: What amendments do you propose for RUFIN?  Effective implementation of the project policy.  The programme should be flexible to accommodate changes.  Individuality of the states should be respected i.e. the peculiarity of the participating states. 28

Issue 8: Expected Result Nothing but success 29

SUGGESTIONS AND RECOMMENTATIONS  Cooperative societies and apexes should be and be seen as public private partnership (PPP) and not another arm of government as is the case now. Government should reduce official Involvement in issues of private initiatives and wills. It should serve better as a facilitator rather than a director. 30

 The cooperative policy should be made known and easily available by its end users. It is not appropriate for a passenger to get into any commercial bus without knowing the transport fare. In a wider perspective societies should be encouraged to develop not to be undermined by a draconian law. 31

For RUFIN to achieve its aims, it must learn from the past experience. One important area of concern is adequate and timely dissemination of information. The other is knowledge. The societies and most importantly the operators of cooperatives should be educated enough to know their objectives, to know about new innovations and ideas that can move the society forward. There should be in place, serious modification and sensitization programmes on the people and about the system. 32

 RUFIN should capture serious minded producers, processors and commercially oriented cooperative bodies that can be developed for effective performance. 33

34