Total loans provided by microfinance banks across the country to Micro, Small and Medium Enterprises in the second half of last year dropped to N183.96 billion. The loans declined by N48.7 billion (about 20.96 per cent) from the N232.73billion they advanced to the microfinance banks in June 2016 to N183.96billion at the end of December 2016.
The report was obtained from the latest Financial Stability Report of the Central Bank of Nigeria indicating that the sector recorded huge decline during the period under review.
The report further showed that total assets of microfinance banks decreased to N341.68billion at the end of December 2016, from N455.96billion as of the end-June 2016, reflecting a decrease of 25.06 per cent. In the same vein, the report said shareholders’ funds for the microfinance banking sector decreased by 42.91 per cent from N135.09bn to N77.12billion as of the end of December 2016.
The decrease in shareholders’ funds was largely attributed to losses by the microfinance banks resulting from increase in non-performing loans.
The report further stated that total deposit liabilities dropped from N191.25billion as of June 2016 to N166.29billion as at December 31, 2016. According to the report, “The total assets of microfinance banks decreased to N341.68bn at end-December 2016, from N455.96bn as of end-June 2016, reflecting a decrease of 25.06 per cent. “The shareholders’ funds also decreased by 42.91 per cent from N135.09bn to N77.12 billion as of December 31, 2016.
The decrease in shareholders’ funds was largely attributed to losses by the microfinance banks resulting from increased provisioning for non- performing loans. “Reserves also decreased by 24.39 per cent to N16.80billion at end-December 2016, from N22.22bn at end-June 2016. The decrease in reserves was as a result of operational losses.”