Posted on December 11, 2009 - by James

Nigerian MFBs Face Crisis Due to Increased Yuletide Withdrawals

Nigerian microfinance banks (MFBs) are facing difficult times as they manage their liquidity positions and also endeavor to cope with the increased yuletide withdrawals by their customers. The season of Christmas is a period of increased expenditure for many households. The case of individuals who have held their savings at some of the microfinance banks mired in crisis adds to the worries that some Nigerians may have in this forthcoming yuletide season.

One MFB staff member, who pleaded anonymity, disclosed that withdrawal has intensified since the Sala celebration, saying “Customers are withdrawing their money and the banks closed their door against us. It is a big challenge. We do not know what to do.”

But Uche Ubani, managing director, Peniel Microfinance Bank Lagos, believes that banking is a continuous process: as some customers are withdrawing their money, others are depositing. He explains that, “As long as the process continues, I do not see any challenge”. He sees the development as being more challenging to those who are already having problems.

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