The Chairman of the National Association of Microfinance Banks, FCT Chapter, Francis Akie, has said microfinance banks account for 95 per cent of total lending in the industry and control 85 per cent of point-of-sale terminals in Nigeria.

“Microfinance banks alone contribute 95 per cent of the total lending in the industry. And as we speak, we have over 85 per cent of the point of sales terminals in this country,” Akie said.

Akie, who is also the Chief Executive Officer of Prudent Microfinance Bank, spoke with journalists in Abuja on Wednesday on the sidelines of a corporate governance training organised for directors and managing directors of microfinance banks in the Federal Capital Territory.

He said the directors were gathered to enhance their capacity, noting that growth in the sector depends on continuous knowledge development. “We have gathered all the directors, chairmen, directors, and MDs of various microfinance banks in the FCT in this place today to enhance their capacity.

We have discovered that without capacity building, we cannot move forward,” he said.

He added that the training became necessary to deepen the understanding of corporate governance and ensure compliance with regulatory requirements. “Without corporate governance in this system, in our microfinance ecosystem, we will not be able to comply with basic rules and regulations of the Central Bank of Nigeria,” he stated.

Making a case for the relevance of microfinance banks, he said they remain central to financial inclusion, especially among low-income customers.

“Microfinance banks are in the forefront of the financial inclusion drive in this country because we’re dealing with the people at the bottom of the pyramid. We are the people who know where they are and what they need from us,” he said.

On loan recovery challenges, he said operators must establish clear procedures before disbursing credit.

Also speaking, the founder and CEO of Better Ways, Dr Victor Dare, said his engagement at the training was to lead discussions on corporate governance and compliance for board members and managing directors of microfinance banks.

He explained that many financial institutions that failed in the past were brought down by poor corporate governance and weak oversight, noting that regulators and industry observers have identified governance lapses as a major challenge in the sector.

According to him, governance in the microfinance space reflects “a cocktail of good oversight and bad oversight,” adding that some institutions are owned by retirees without banking backgrounds who appoint career bankers as managing directors, often leading to boardroom disagreements and weak supervision.

Dare stressed that corporate governance goes beyond routine monitoring and compliance, describing it as the foundation of sustainability, profitability, and the going concern of any bank. He added that institutions should be assessed on individual merits, including the competence of board members and their working relationship with management.

On financial inclusion, he said Nigeria was utilising less than 30 per cent of the potential of microfinance institutions, attributing the gap largely to policy direction and the regulatory environment, warning that applying the same regulatory standards used for commercial banks could limit MFBs’ ability to serve low-income customers while remaining profitable.

The PUNCH earlier reported in January 2025 that the CBN revealed 95.66 per cent of bank debtors borrowed from microfinance banks as of September 2024.

This dominance highlights the critical role of MFBs in the country’s lending ecosystem, particularly for individuals and small businesses. Out of 6,537 total debtors recorded across all creditor types, 6,253 were linked to MFBs, reflecting their pivotal role in providing access to credit.

The PUNCH also reported that Nigerians made transactions worth N85.91tn through POS terminals in the first half of 2024, a figure over seven times the N12.21tn recorded for ATM transactions in the same period.

Compared to 2023, the value of POS transactions grew by 77 per cent, rising from N48.44tn to N85.91tn, while the volume of transactions increased by 31 per cent, from 4.87 billion to 6.39 billion.