Olamiposi Modupe Alao is the Chairperson, Doje Microfinance bank. In this interview with RUKIYAT OGUNWADE, she speaks on why Microfinance banks do embrace technology, innovation to address customers needs, roles of microfinance banks in response to the economic situation of the country and Doje Microfinance bank’s interventions so far in the economy among other issues excerpts:-
What is your assessment of Microfinance banks response to the economic situation of the country?
Microfinance banks , (MFBs) in Nigeria have been playing a crucial role in increasing financial inclusion and providing access to financial services to the unbanked and underbanked population. In response to the economic situation in Nigeria, MFBs have faced various challenges such as the impact of inflation, instability in foreign exchange rates affecting small scale business, and regulatory changes. Doje Microfinance bank has implemented measures to support our customers during these challenging times such as offering flexible repayment options, providing financial literacy, providing training programmes to staff, and strengthening risk management framework. However, there have been concerns about the sustainability of some MFBs due to rising non-performing loans from customers with excuses of the economic situation of Nigeria.
Despite the roles Microfinance banks play in economic development, how do you explain their going bankrupt and the collapse of some?
Microfinance banks play a crucial role in providing financial services to individuals and businesses typically excluded from traditional banking services. However, like other financial institutions, microfinance banks face challenges that may lead to bankruptcy or collapse. These challenges can include poor financial management, high operational costs, inadequate risk management practices, and economic downturns. These and many more factors affect the ability of borrowers to repay outstanding loans. Additionally, governance issues, fraud, and over-indebtedness of clients can also contribute to the failure of Microfinance banks. It is important for Microfinance institutions to have strong internal controls, risk management frameworks, and governance structures in place to mitigate these risks and ensure their long-term sustainability.
What will you say has been the immediate effects of improved MSME financial inclusion in the Nigerian and African economy?
Resilience of the African man against all odds. Overall, improved MSME financial inclusion can have a transformative impact on the economy when small businesses are empowered which will result in driving economic growth and reducing poverty.
What are the key challenges facing the microfinance industry in Nigeria, and how is your bank addressing them?
The microfinance industry in Nigeria faces several key challenges which include: limited access to funding, high operational costs, insufficient financial literacy among clients, lack of proper regulation or supervision, and the impact of economic fluctuations on the repayment rates of microfinance institutions. At Doje MFB, we are implementing cost-reduction measures such as modern technology, staff training, financial literacy among our customers through educational programmess and workshops. Also, we are strengthening regulatory frameworks in our daily operations, improving supervision to ensure the stability and integrity of core values of the bank, and developing risk management strategies to mitigate the impact of economic fluctuations on the repayment rates of the bank. All of the above is aimed at improving and increasing operational efficiency.
May we know about the bank in terms of when it started operation and its achievements so far?
Doje Microfinance Bank formerly known as Olowolagba Microfinance Bank was founded in April 15, 2010 Its goal is to aid and improve commercial activities in Ogbomosho’s local community in Oyo State. Doje Microfinance bank seeks to help the community by enhancing development and taking individuals out of poverty. This will be achieved by creating access to loans for petty trading which is how majority of the individuals have been able to grow big businesses within the community today. Furthermore, we provide agricultural intervention and support for people living in rural areas because we are a liaison bank for constituency projects in the community amongst many others.
Your bank seems to be succeeding when some other ones are struggling, what are you doing differently?
We differentiate ourselves by focus on customer satisfaction, improving our products and services, providing efficient operations within the bank and ensuring effective risk management for customer satisfaction. Also, we are embracing new technologies to address customer needs which will help to maintain a strong financial position.
In terms of recapitalisation, are you acquiring any bank?
No, we are not. However, when we restructure our financial obligations, we can consider recapitalisation because it will help us optimise our capital structure.
How does your bank leverage technology and innovation to better serve your customers?
At Doje MFB, we leverage the use of Digital banking platforms to provide convenient and accessible services to our customers. These include: mobile banking apps, online account access, and digital repayment options. As we expand, more options will be explored such as Blockchain technology.
How important are partnerships and collaborations in achieving the goals of your microfinance bank?
Partnerships and collaborations are crucial for the success of any Microfinance bank. By partnering with other organisations such as not for profits, government agencies, or financial institutions, we can access additional resources, expertise and networks. This can help us reach more clients, expand our services and achieve set goals more effectively. Collaborations will also allow us leverage the strengths of our partners leading to mutual benefits and sustainable growth in the long run.
What are your plans or expansion strategies for your microfinance bank in Nigeria?
Only a few can be mentioned because in this new era, the economy and technological factors are on constant change. At Doje MFB, we will focus on developing new financial products and services tailored to the needs of underserved customers. We will also expand operations to rural areas or underserved communities to reach more potential clients. Furthermore, digital solutions and data analytics tools will be implemented to improve efficiency for a wider customer base. We will also collaborate with other financial institutions or organisations to increase financial inclusion by investing in staff training and development as it enhances customer service and operational capabilities. Lastly, we will build partnerships with local businesses or nonprofits to support community development initiatives.
How do you see the future of microfinance banking evolving in Nigeria, and what role does your bank play in this evolution?
Microfinance banking in Nigeria has the potential to grow significantly in the coming years. As more people gain access to financial services and technology continues to advance, Doje MFB can play a crucial role in promoting financial inclusion and economic development in the country. Doje MFB will partner with fintech companies to develop new financial products and services tailored to the needs of low-income individuals and small businesses. By embracing digital transformation and fostering financial innovation, we can better serve our clients and contribute to the growth of Nigeria’ s economy. Overall, the future of microfinance banking in Nigeria looks promising because microfinance banks have the opportunity to drive positive change by expanding access to financial services and empowering communities to achieve their financial goals.
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