‘We are supporting LSG on loan mobilization for LARUTI’

Mrs. Susan Tayo, assistant vice president GS Microfinance Bank in this interview with Vincent Ekhator speaks on the Lagos State Rural Transport initiatives (LARUTI) and other services rendered by the bank

Laruti initiative 

This program is designed by the state government through the ministry of rural development to help give succor to the economically active poor. It basically involves the provision of tricycles to individuals in the rural areas with the singular motive of conveying agricultural products to the point of sale. The state has provided a handsome amount of loan for the purchase of these facilities and beneficiaries would be paying 5.0 per cent lower than what is obtainable in the bank.

GS Microfinance Bank is supporting the state government with the mobilization of credits from our teaming clients who are also interested in the scheme. The program is designed into three categories and we are interested in the category C, which is the N600, 000 worth of tricycles. What we do is to encourage and mobilize savings amongst clients and also ensures that the funds are disbursed to the Lagos state government and ensuring that our clients access the tricycles, within the shortest possible time.

We encourage, sensitize and advise clients on the need to judiciously use the facilities and ensure that the repayment process and final clearance is facilitated. The program is very reassuring because the payments are made to individual savings account and it also yield interest for clients.

It is expected that all beneficiaries must be morally sound and must have passed the certification test by the ministry of transportation and such individual must be used to plying rural roads and none would be allowed to ply urban centers or cities. Beneficiaries are also expected to possess a driving license. One is allowed to make payment on a daily, weekly or monthly basis and immediately after the last installment; all the documents relating to the tricycle would be handed over to beneficiaries. We are helping to redefine the culture of savings among the active poor by making sure that they benefit from the scheme. We ensure that they save even as low as N50, N100, N200, N400 or more. The interesting thing is that within a short while our clients are amazed with what they have been able to save. Our bank is desirous in bringing out the creativity in you. We have about nineteen branches spread around Lagos and we still intend to do more.  We are closer to the people to allow for easy access for credits. Our teams are on ground to actually see these clients and relate with them on a one-on-one basis.

Central Bank microfinance policy

The Central Bank of Nigeria (CBN), to the best of my knowledge, is doing some good work. As we all know, this is a new venture and it would grow with time. The CBN is actually helping with their policies and training, a lot of microfinance banks are actually waxing on while some Nigerians have already been empowered. Their policies and regulations are encouraging and they are trying in the training and retraining of management staff this in my own opinion would allow for further growth in the sub-sector.

I think the capital base needs to be jacked up a bit to cater for over 60 per cent of Nigerians who needs these credit facilities. The CBN and the federal government should also help to ensure that funds budgeted for microfinance banks are actually disbursed and well monitored. They should also help to ensure that the state and local government also play their own role in assisting microfinance banks in the country. In ensuring that there is food for all before 2015, all hand must be on deck and the CBN should continue to be supportive. All their capacity building programs for microfinance banks have greatly enhanced our skills and they have also increased the tempo of their oversight responsibility on Microfinance Banks. This will help build customers’ confidence. Since the inception of microfinance bank in the country so much has been achieved. I will say it has not been a bad year for the industry given the newness of the scheme and the inherent skill gap. We will begin to see a little more of professionalism this year resulting from several compulsory capacity building programs organized by the CBN and other private initiate.

Vision of GS Microfinance Bank 

GS Microfinance Bank is driven by the passion to ensure that the economically active poor in the country are reinstated back to the society by allowing them become successful entrepreneurs. Within a very short period of our existence, our customer base has really improved. We have seen people metamorphosing from street traders to kiosk, supermarkets and stores owners. Our passion, joy and happiness are to see people grow. The passion of the management staff is to be able to touch lives positively and bringing out the creativity from a dispassionate poor Nigerian. 

The essence of microfinance banks is cantered on how many people you have touched and not how much profit you have made. We partner with those that could also help in financing some of our projects.

Instead of giving people money for their immediate needs, we empower them by exposing to some of our unique and well packaged products.

Sometimes the interest rates could be very high because the cost of the funds itself is also high. The Lagos state government is actually trying by assisting some microfinance banks with funds and ensuring that these loans are giving to many people at a very lower interest rates and I think other states should take a cue. We are talking to the local governments and we are trying to see how they could also help us do more. The truth of the matter is that a lot of people have been touched. People who least expected that they would ever become relevant in the society but GS Microfinance Bank has giving them a new lease of life and would continue to ensure that the active poor in the society are empowered for sustainable economic development. 

Product offering

We are poised to fast track our customer's business ventures by providing innovative, satisfying and choice of microfinance products to our clients thereby empowering them economically. We offer our customers a range of opportunity to grow and do their businesses profitably through our carefully designed products.

We have what is today referred as the GS corporate account or sole proprietorship account, this is an ideal and flexible way of making and receiving payments for registered entities, it entails the issuance of personalized cheque book and ATM cards but it requires an opening account of only N10, 000, it provides a convenient overdraft facility for those who operate this type of account. There is also LPO financing, this product is carefully designed to finance local purchase orders and financing of projects, it attracts equity contribution of 30 per cent and allows easy access to capital. We have the GS My-Share Loan. This facility allows for investment in shares of quoted companies by customers. It creates room for investment and capacity building for clients and your share certificates could be used as collateral in accessing loans. There is another one we call the GS Lease. This product is targeted at the Small and Medium Enterprises (SME’s). It allows clients to finance and purchase assets either for personal or business use. It is also accessible to unions’ and groups with very low interest rates. Our bank also provides the GS Trading Loan. This helps to provide capital for individuals with existing business activities and it is only disbursed to individuals and groups. There is also the GS Rotating Savings Credit Accounts and it is designed to meet the needs of low income groups, market men and women, artisans and other active poor who wants to make daily contributions while also enjoying the benefits of loans from bank. This allows for loan access of about 200 per cent on savings with no collateral required. We have the GS Education Support Package. This allows you to make payment of your children and wards school fees because we believe that the only way we can invest in the future of this country is to invest in our children’s education, facility for advancement is based on 150 per cent of take home pay, no charges on facility and no collateral is required.

There is another one we call the GS Akowonjo, this product is in silver, gold and platinum and it is designed to ease the access to loan through groups.  We also have the GS MFB; this is an ideal product for traders and prospective SME’s, especially market women, artisans, corporative, mechanics amongst others, this product allows for daily deposit of fixed amount with our bank. It requires a minimum tenor of 6 months daily savings and you are entitled to an additional bonus of a day contribution at the end of each month. There is another product, we call the GS target savings, and it is designed to meet the particular future needs of our clients and allows you to withdraw close to 300 per cent when target is completed. There is another one we call the GS future leaders account, this particular product is carefully designed towards caring for the future of your children; it requires a minimum opening of account with N1500 a minimum lodgment of N3000 monthly, interest is at 2 per cent above prevailing rates.

Assessment of operational environment

I think it has been fair so far. Everything has its negative and positive impact but I think it is plus considering the short period of its existence. Microfinance banks have actually help to bring banking to the grass root and a lot of people have benefited from the support in this industry and very many would still enjoy the dividends of its existence what the government can only do is to assist us with more funds so as to do more for the poor people in the society. The knowledge that one can easily access loans from these banks have been increased and it is now been accepted and there are clear indications that the microfinance banks would really contribute its own quarters in ensuring that the vision 20-2020 is achieved but the government still have to do more in terms of infrastructural development, in terms of political reforms and making sure that the basic facilities needed for industrialization are seriously facilitated.

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