The House Member representing Bida, Gbako/Katcha Federal Constituency, Hon Saidu Musa Abdullahi has posited that this is not the right time to recapitalize micro finance banks due to global economic crisis. He made the statement at the 11th AGM of National Association of Micro Finance Banks (NAMB). Excerpts;
What is your take on the recapitalization of micro finance banks as instructed by the Central Bank of Nigeria?
Let me quickly point out that the recapitalization exercise is not a bad thing in its entirety. We are only concerned about the timing of the policy.
The global economy has been in crisis; of course, for obvious reasons.
The covid-19 pandemic has had a huge impact – negatively – on the economy. So, we feel there should be better time for us to roll out some of these policies; considering the critical role that micro finance banks are expected to play in the economy.
Now we have a situation where government has rolled out interventions. They have injected funds into some critical sectors.
If they really see the need for us to recapitalize micro finance banks; I think there is nothing wrong in the government following the same route in providing interventions for micro finance banks.
It will be too wrong a policy for us to implement now because it is going to affect some of them.
We will end up cowding out a lot of micro finance banks. Look at the impact of that on employment; look at the impact on general economy.
Of course, for each policy, you have to be able to weigh the cost and benefits of the policy.
If the benefits outweigh the cost, you will go ahead and do it. But at this material time around, the cost of implementing the policy far outweigh the benefits.
That is why we said; for now, we should pipe low.