As the fiscal and monetary policy makers in Nigeria strive to put the country back on the path of growth and development, economist and public analyst, Dr. Biodun Adedipe, has said more attention needs to be paid to the microfinance and mortgage banking sectors.
These two finance sectors, he said, can trigger an uptick in employment, increase activities in the nano and micro business environment and jointly address poverty and insecurity in the country.
Adedipe, while speaking at the bimonthly forum of the Finance Correspondents Association of Nigeria (FICAN) in Lagos at the weekend, submitted that there is need for monetary and fiscal authorities in the country to channel interventions through microfinance institutions.
This, he said, is necessary because of their proximity to the lower rung of players in the economy.
According to him, MFBs are more able to reach nano enterprises, which he described as one-man businesses as well as micro enterprises. These two sectors, he said, have the capacity to employ up to 80 per cent of the workforce in the country.
“For an economy in the state where we are, MFB is one sector that our government and the central bank should not joke with. The reason being that they intervene at the bottom of the pyramid and there are some players there that have proven to be credible.
“Which means if you want to intervene in the economy, address the issue of unemployment, that also connects to insecurity, those are ready institutions that you can intervene in through SMEs” he declared.
MFBs in the country have in times past urged that the Central Bank of Nigeria to channel some of its intervention funds, particularly those meant for the (MSMEs) through them.
Adedipe also called for policies that would help grow the mortgage banking industry. He said that of all sectors in financial industry, mortgage banks are the weakest.
“Looking at year-on-year growth in the financial market, the mortgage industry is the weakest sector. This means that we still need to look at the policies for that sector.”
Noting that the real estate sector is important to the economy, he said: “This shows why growth has been sluggish because the avenues that can trigger growth we are not paying attention to. We are spoiled by the money we make from crude oil.”
Meanwhile, he warned authorities to take pragmatic steps to save the economy, saying, the downward trend in all indices: price, production and export is a warning sign for Nigeria and calls for the urgent diversification of the economy using foreign earnings.
According to him, with a monthly import bill of N2.283 trillion or $6.025 billion in the first quarter of 2021, liquid external reserves of $32.85 billion as at July 9, 2021, represent 5.45 months of import, meaning that Nigeria is below the minimum threshold of 6 months of imports for stability and twice below 11 months required for an economy in crisis.