Microfinance Money Market Operation Begins 2013

The National Association of Microfinance Banks (NAMB) says that the proposed Microfinance Money Market Operation (MMMO) will become operational by the first quarter of 2013.

The president of the Lagos State chapter of NAMB, Mr Valentine Whensu, who made this known in an interview with the News Agency of Nigeria (NAN) in Lagos on Sunday, said the modalities for the operation of the MMMO were being finalised, adding that the association was working with Kakawa Discount House to ensure its smooth implementation.

Whensu said the MMMO was an initiative of the Lagos State chapter of NAMB aimed at improving the liquidity of the microfinance sub-sector.

“We believe that instead of trading one-on-one, we should trade on a collective basis to ensure increased liquidity in the system.

“We have operators who have surplus funds in the sector and we have those who are deficient in funds for business transactions.

“They have their treasury bills and collaterals they are not using; so, we decide to register ourselves and follow the conventional money market system.

“The MMMO will galvanise business activities because the deficient operators can now access funds at good rates. In addition, it will also engender confidence in the sub-sector,” he said.

Whensu said the association was currently working on how to ensure the sustenance of the initiative.

“In the past when a similar initiative was initiated, they ran into problems and to forestall the recurrence of such problems, we are currently working with Kakawa Discount House.

“Hopefully, I believe the product will be out in the first quarter of 2013,” he said.

Whensu said the initiative would also open a window for investments, adding that some donor agencies were interested in the development in the microfinance sub-sector.

He, nonetheless, stressed that the donor agencies would like to invest in a market environment where they could made good returns.

Whensu said microfinance banks in Lagos State, which were involved in trading activities licensed by the Central Bank of Nigeria (CBN), were eligible to participate in the programme.