Lovonus Microfinance Bank has said that it has continued to preserve the quality of its loan portfolio despite economic pressure.
In an interview, the Managing Director/Chief Executive Officer of the bank, Adeola Ayibiowu, said the development reflected a cautious and disciplined approach to lending at a time when many microfinance institutions are struggling with rising defaults.
The PUNCH reports that Lovonus Microfinance Bank has said it was seeking to disburse about N1.5bn in loans to its customers by the end of the year.
Ayibiowu said the bank has recorded steady growth in its loan book with strong exposure to trade, agriculture-linked activities and essential services, sectors that remain critical to grassroots economic activity.
Also, the bank has expanded its customer base gradually, with a growing number of first-time borrowers gaining access to formal credit for the first time. He added that digital adoption has improved across the institution, with customers increasingly using digital channels for account access and loan repayments, while internal automation has enhanced efficiency and turnaround time.
He explained that supporting micro-, small- and medium-sized enterprises has remained central to the bank’s operations, particularly for women-led and youth-driven businesses that often face greater barriers to finance. Maintaining portfolio quality under tough economic conditions, he noted, is an achievement that sets the bank apart in a sector where inflationary pressure and income erosion have weakened repayment capacity.
Addressing the challenge of affordable credit, Ayibiowu said the tension between financial inclusion and risk management is a defining issue for microfinance banks.
He emphasised that while Lovonus is “committed to supporting entrepreneurs and low-income earners, lending must remain disciplined; the bank does not price loans emotionally or extend credit blindly in the name of inclusion.
“Its approach is built around cashflow-based lending rather than asset assumptions, the use of group and cooperative structures to strengthen peer accountability, and a graduated lending model that allows customers to earn higher limits over time. Early intervention, rather than punitive recovery, is adopted when repayment stress emerges,” he stressed.
On impact, Ayibiowu said Lovonus tracks both financial and non-financial indicators to assess the effectiveness of its interventions. These include repeat borrowing rates, business survival and growth trends, income stability and employment generation among supported enterprises. Beyond data, he noted that field officers maintain close engagement with customers, offering insights into tangible outcomes such as traders expanding stalls, artisans acquiring new tools and farmers moving from subsistence production to consistent market supply.
Ayibiowu stressed that the impact of microfinance is cumulative and evaluated over time rather than instantaneously.
Looking ahead, he identified value-chain financing, particularly within trade and agriculture-linked clusters, as a major growth opportunity for the bank. He also pointed to youth- and women-focused enterprise financing, as well as agency and partnership-led expansion, as more sustainable pathways than costly brick-and-mortar growth.
Geographically, he said targeted expansion within economically active corridors makes more sense than aggressive nationwide spread, arguing that growth in the current climate must be selective and deliberate.
He acknowledged that the microfinance sector continues to face perception challenges around interest rates and customer experience but said Lovonus is addressing this by “prioritising transparency, respectful engagement and long-term relationships. Clear loan terms, customer education and consistency in conduct are essential to building trust in a sector often criticised for trapping borrowers.”
