In This Interview With Mr. Godwin Ehigiamusoe, managing director, LAPO Micro Finance Bank, he speaks on the role of micro finance institutions in a poverty ravaged economy like Nigeria and the effort to salvage thhe sector. He spoke withh Gboyega Adeoye
What is your comment on the policy of the current Central Bank of Nigeria (CBN) Governor?
We should just allow him to settle down. The man has just come in and he is just settling down. I think it is a general feeling that he should be allowed to settle down. That should be the approach. I don’t really see anything worth talking about on his policy when he is just new in office. He should be allowed to settle down first.
Let’s zero in on LAPO operations. How have you been coping?
We are in the industry and we are doing well. We are playing our part in the industry. We have been of tremendous support to the industry and that has been our strong objective. Majorly we are looking at how we can support the entire industry. We look at the magnitude of poverty in the land and we realized that micro finance banking is all about poverty alleviation. It is all about making meaningful impact on poverty. The micro finance sector should be a very strong sector that should be able to make meaningful impact in alleviating poverty among our people. What I am more concerned with now is to see how the industry can be stronger. We must have a micro finance industry that is very strong. Only one institution cannot satisfy the yearnings of the teeming number of Nigerians that need their services.
What is the ultimate aim of LAPO as an institution?
The first line of micro finance is to be able to support low income people. To set up and sustain their micro businesses. The task of micro finance is to basically help the low income people. The second level is that once that is done, it translates to improved standard of lives. When you now move from there, you start to think of how you could make entrepreneurs from these people. And by that, you need to enhance the quantum of capacity you provide for these people and also you enhance their businesses. By so doing, you have actually moved from alleviating poverty among these set of people to making them employers of labour. That is another level. So the plan is not only to support them in their businesses but also to nurture them to becoming creators of jobs for other people. That is the ultimate goal of most micro finance institutions across the world. Initially, help to grow their businesses and eventually nurture them to expand the businesses and start creating jobs for other people.
Are you satisfied that you have been impactful in this regard?
Yes, to a large extent, we are. Our modest objective is to create a micro finance institution that is sustainable and provide financial services to low income people who are obviously excluded from the mainstream financial system and doing so on a sustainable basis; to help grow their businesses and also to be there to help nurture the businesses to the point of sustainability.
How have you been able to balance your reaching out to people across the country?
Yes, if I look at it from my own perspective, I will say we have been able to experience dramatic growth over the years; on annual basis. We have been able to achieve sustained growth in the past 20 years of our operations. That means, in terms of outreach, in terms of job creation, we have been able to make significant impact. We strongly believe that we want to build an institution that is strong and being able to develop and sustain people in their businesses. We have also been able to develop a platform. Today we are in 27 states of the federation. We did not achieve this overnight.
What is your volume of business for this year?
So far, we have been able to meet our target. We have been able to meet the monthly milestone in reaching out to our clients and we have been able to sustain our growth. Now we are providing financial services to over a million clients. What is important is that there is still a large number of people that still desire financial assistance. So our desire is still to see how we can strengthen our system to be able to do more in terms of reaching out to people. In terms of volume, we are on the increase; that much I can say.
What is the loan recovery mechanism put in place to ensure that money that goes out are recovered?
I will probably talk about the industry generally in this regard. The micro finance industry over the years suffers from delinquency. This delinquency is gradually being addressed. With the intervention we are seeing here and there in the sector and the determination of the practitioners to get over the vices in the industry, we shall be able to get over the challenge of recovery. For us as an institution, I think we have overcome that challenge long ago.
Do you consider moving into the tertiary institution to nurture students towards being self employed at the end of their courses?
As a financial institution, the role of micro finance is to put in place the right structure and provide financial services to people that are willing and able to make use of the services. That is what I think is the primary function of the micro finance institutions.
How would you rate Nigeria’s micro finance institutions vis-à-vis their counterparts in the African continent?
Let me say it this way. I strongly believe and to a large extent, I should know that the micro finance sector in Nigeria, taking into account the antecedents, have done so well when you compare them with other jurisdiction. We need to also emphasize that micro finance as a movement, was sufficiently developing in the 1990s. And unfortunately for Nigeria, that was the time we were under the military regime. And the implication was that the micro finance sector in Nigeria was completely cut off from the international micro finance. It was during that period that the micro finance sector in other part of Africa, particularly, the East Africa, was developed. And so, when the civilian administration came in 1999 and the policy put in place in 2005, within a very short period, the micro finance sector has grown with the support of the regulatory authority and also the determination of the operators.
What is keeping LAPO standing when so many micro finance institutions have crashed out in past years?
I think the major thing is that we have been around for a long time as a nonprofit institution. During this period, we’ve made huge mistakes and in the process, we’ve also recorded huge achievements. To be fair to many of the micro finance institutions, they never had such experience that we had. To learn, make mistakes, correct and then move ahead. That, for me, is the major thing. Our methodology also counts because we emphasize on training of our staff. These are lessons of the past. I believe that in the coming years, most of these micro finance businesses in Nigeria will also be performing excellently. We have been able to strengthen our system through our experience and the lessons that we have learnt, particularly, in the area of recruitment and training of staff, area of methodology and approaches, in the area of maintaining credit discipline and finally in the area of ensuring that, periodically, we develop mid-term strategy plan that we diligently implement. And I still want to emphasise that we arrived at all these as a result of our experience in the past. To be fair to these other micro finance banks, they never had such experience.
Is your operation impeded by the insurgencies in some part of the North?
No. But the commercial banks are there. Other businesses still exist there too. Agreed that we are not in any of the troubled area but the reality is that other businesses are there. We are in Kano and Kaduna states and we are making waves there.
The mission of LAPO is to alleviate poverty: how easy is this attainable under the present economy?
Improving lives to us is hinged on the fact that we strongly believe in the power of credit in transforming lives. We believe that access to affordable credit is a very solid escalator that you can fall back upon. And therefore, as long as we provide a range of financial services on affordable terms, or that bring about transformation or improvement in the lives of our clients, then we are achieving our goals.
What was the height you envisioned to take LAPO to when you set out?
To be sincere with you, I never envisaged that LAPO would be a big as it is today. When we set out, we were actually not talking about micro finance. There was nothing called micro finance at that point and nobody envisaged that one day, in 2005, there would be a micro finance policy in this country. What I wanted to do as somebody that was committed ideologically to supporting the masses, was simply to provide the opportunity for people to improve their lives through access to what we called micro-credit then. And so, at a point, it became obvious that the viability of providing loans for low income people was demonstrated and proven, and so, the next step for everyone of us here and also in other countries was to ensure how to scale up and realizing that you can only realize making meaningful impact on the lives of poor people if you are able to extend your service to a large section of them. That informed the formation of LAPO so many years ago and which culminated to our scaling up to where we are today.
What was the point where you realized you are growing beyond your projection and was there any point you thought of winding up?
The first thing was that globally the micro finance in the 1990s was a period when the discussion in micro finance business was about viability and sustainability. And so by 1991, the possibility of putting money in the hands of poor people has been demonstrated and it worked. Few years later, when that was proven, then the possibility of scaling up was demonstrated and that was responsible for the decision we took in 1999 to see how we could move away from providing services to a very limited number of people and to begin on a large scale. And in line with our mandate of poverty alleviation, as I’ve said earlier, reach out to a large number of poor people and then you have greater spread in alleviating poverty among the poor people.
Was there a point you got fed up?
Yes, you get to a point as a young man who thinks you can put money in the hands of some poor people, they make use of it and eventually they pay back. But you suddenly found out that, one, that you may not have enough money to give people, and when you do, you found out that some of the people, for whatever reason, fail to pay back. What happened then was that the whole idea, the whole expectation you have was threatened and the next thing is to be asking yourself, “was this thing worth doing?” I have that a number of times but what kept me going on was that strong commitment for alleviation of poverty and also my strong believe in money as a tool for addressing poverty and capital as a tool for transformation.
Do you work for any establishment to get the inspiration to form LAPO?
I left the university and I was quite sure of what I wanted to do. I joined the cooperative movement. As a cooperative movement, people pull their resources together and from this pool, people who are in need can draw from it to settle their pressing needs. So, I was in that movement for quite some time and it was there I saw what access to finance at affordable rate could do in the life of a poor person
Do you nurse the idea of floating a full blown bank in future?
Anything could happen. That will depend on the dynamics in the institution and in the sector. But if you ask me at this moment, I think my aspiration, that may change, is not to become a commercial entity. I would rather remain a big financial institution that will continue to provide micro finance services.
Do you have foreign partners?
Micro finance is essentially an international business and therefore you need to have a lot of collaboration and partnerships at various levels. In the level of real financing and also in terms of capacity building, etc. We have benefitted much from partnership, both locally and internationally. We shall continue with this as long as it helps us to further our mandate of providing affordable and responsive financial services to low income people
How many businesses have you grown all together?
As a financial institution, we have been able to, over the years, reach a very large number of clients. Access to finance is determined by service users. At a point, they come in and at a point they retreat. But by and large, we have over a million clients at the moment and across the country. Looking at this, I can say there is still a huge gap between the demand for financial services and the supply
How do you relax?
Well, the issue of relaxation has to do with what makes you feel good. I think the first thing for me is actually seeing clients, engaging their businesses, talking to them and relating with them on their experiences and what they are actually going through. In between my engagement, both locally and internationally, I try to spend quality time with my family and I also enjoy reading good books. I also take time to watch football. And my son took me into the club of Arsenal. And unfortunately, when Arsenal was shy of getting trophies, he left me there. I think I’m too old to port from Arsenal to anywhere.
Do you have Arsenal jersey?
No, I don’t. But I think my children and those close to me know I could be labeled a gunner for life!
Have you watched Arsenal play live?
No, I have not had the opportunity to do that. But I think I look forward to do that.
So, do you have a weekend; and if you do, how do you spend it?
In Lagos, because I have not been here (Lagos) for a very long time, my Saturdays are quiet. It is time to relax and then do some walking around and all that. But in Benin, it is a different thing because you have relationships. So, weekends can actually be very busy, especially when you have activities.
Do you attend social functions on weekends?
I don’t think I’m more into that side. Though I will not also say that I would shy from all social activities. Yes, I do, especially when they are organized by people that I have a lot of respect and love for.
Who is your favorite musician?
Well, I think people of my age would not go into serious love for a particular music but I enjoy Fela (Anikulapo) music.
Do you have a special way of dressing on weekends?
I don’t think so
Any special meal?
I don’t think so. I do a lot of moving around
