Expert advocates for microfinance license fee reduction

 The federal government needs to reduce the cost of obtaining a microfinance license, Mr Ayodeji Jaccuss, the co-founder of MenaCred, a lending company, has advocated. 

Jaccuss made the allegation in an interview with the Nigerian News Agency in Lagos on Thursday.

He noted that the reduction in the license fee would help create a more competitive and enabling environment in the sector.

“The importance of regulatory laws cannot be overemphasized, so in order to run a lending business, you need to have a state lending license to operate, then if you want to go a notch higher, you would need a microfinance license.

“The main problem is that if we want to move up by getting a microfinance license, the fee for that is a lot and basically there is no middle ground between them.

“If we take a look at other developed countries, there is a middle ground and modules where institutions like ours can operate and there are clear limits on what you can and cannot do.

“The government can help with a well-structured licensing regime for fintech and lending companies, as this would help boost the sector and make it a more competitive place,” he said.

He urged the government to collaborate more with private financial institutions in the distribution of government funds.

“The government can collaborate with institutions like us when it comes to distributing funds because we have the database of clients and individuals and we will effectively monitor the payment.

“With that, we could directly impact people’s lives, because we have all the necessary information we need about the beneficiaries and those who really need it would be the ones who get it,” he said.

Jaccuss praised the federal government for clamping down on some lenders, saying the method of shaming customers was unacceptable.

He said there were better ways to recover debts, noting that proper checks should be made before loans are granted.

“Shaming borrowers and also sending unnecessary messages to the family that violate the policies that come with credit is demeaning as there are other ways to do it.

“The federal government is to be commended for clamping down on some lending companies as there are better ways to do it and one of them is to run a credit check and strengthen their algorithm.

“In other countries there are serious consequences for defaulters, but that cannot be said of our country, that is why personal verifications must always be carried out, but it must also be taken into account that the risk associated with this business cannot be totally avoided. ,” he said.

He urged borrowers to always pay their loans on time to improve their credit ratings. (NAN)