Accion MFB to Disburse N60 Billion in Loans for MSMEs by 2025
Accion Microfinance Bank (MFB) has announced plans to disburse loans totaling N60 billion to micro, small, and medium-scale enterprises (MSMEs) in Nigeria by 2025. This ambitious target was shared by Taiwo Joda, Managing Director and Chief Executive Officer of Accion MFB, during a recent media briefing following the bank’s Financial Inclusion Seminar (FIS). The seminar, themed ‘Digital Lending: A Path to Financial Inclusion or a Barrier for the Informal Sector?’, serves as a platform for stakeholders to discuss challenges and opportunities in the microfinance sector.
Digital Innovation Driving Loan Growth
Reflecting on the bank’s progress, Joda noted, “Our excitement lies in what’s ahead. Transitioning from manual processes to digital platforms resulted in a 1,000 percent increase in uptake. This year, we’ve averaged N3 billion in monthly loans, amounting to N33 billion so far. Over the last decade, we’ve disbursed N250 billion to MSMEs, with an average loan size of N700,000.”
Looking forward, Joda revealed plans for significant expansion. “In 2025, we aim to provide N60 billion in loans, doubling our current disbursements. This is essential not only to sustain our customers’ businesses but also to grow our customer base. We acquire 20 percent new customers monthly and plan to expand to four new locations: Kwara State, as well as additional branches in Abuja, Kano, and Kaduna. With this expansion, we will leverage technology to attract and serve new customers effectively,” he said.
Exploring New Markets and Building Trust
The bank is also targeting collaborations with e-commerce platforms, business-to-business (B2B) opportunities, and younger demographics such as Gen Z. Joda explained, “We are redesigning products to cater to these segments and meet their evolving needs.”
Discussing the challenges of digital adoption, Joda emphasized the importance of trust. “There is still skepticism among underserved populations about using digital platforms. For instance, some customers fear losing money when using their phones. Trust issues hinder the adoption of digital innovation, and addressing this requires collaborative efforts to improve digital literacy. We plan to conduct monthly virtual meetings with customers to discuss trends, risks, and preventive measures.”
Technology Enhancing Risk Management and Loan Performance
Joda highlighted the role of technology in improving loan performance. “Our nonperforming loans are in single digits, a significant improvement from last year. Advanced technologies enable us to assess risks rigorously,” he said.
Dispelling myths about low-income borrowers, Joda noted, “Contrary to popular belief, low-income individuals are reliable in repaying loans. Most defaults stem from macroeconomic challenges, not character. Deliberate defaults account for less than three percent of cases.”
Digitization as a Catalyst for Growth
Paul Ehiagbonare, Chief Digital Officer of Ion Microfinance Bank, echoed the transformative impact of digital solutions. “We prioritize accessibility in digital transformation. For instance, digitizing one product led to a 1,000 percent increase in performance within 10 weeks, surpassing what was achieved in three years,” Ehiagbonare said.
The focus remains on customer-centric innovation. “Our digitization strategy ensures we meet customers where they are, making services more accessible and tailored to their needs,” he concluded.
Conclusion
Accion MFB’s focus on technology-driven innovation, expanding accessibility, and fostering trust underscores its commitment to empowering MSMEs and driving financial inclusion. With plans to double its loan disbursement and expand its footprint, the bank aims to set a new benchmark in Nigeria’s microfinance sector.
