CURRENT CHANGES IN COFRED. Posted on September 11, 2020 10:30
CURRENT CHANGES IN COFRED.
Cofred would be launching its microfinance bank in no time and this has led to the current changes taking place especially in our payment solutions web application. We intend to take off as a unit Microfinance, by writing to the Governor of CBN stating our intention. The changes have no effect on your CofredPay account, so no action is required from you at all.
Microfinance in Africa is a powerful tool aimed at promoting economic growth and generating employment, yet the sector is fragile and its outreach is limited: only 1 in 5 households has a deposit account with a regulated financial institution, compared to an average of 1.5 in 5 in other developing regions, and 4 in 5 in developed countries.
One significant challenge to the development of an efficient and sustainable microfinance sector in Africa is the lack of technical capacity building at various levels: among retail financial institutions (micro-level), the microfinance market infrastructure (Meso level), as well as the regulatory environment (macro-level).
Microfinance services refer to loans, such as;
Consumer and agriculture loans
Trading and livestock loans
Trading and agriculture loans
Trading, education, and agriculture loans
Skills development and agriculture loans
Petty business loans
Deposits, insurance, fund transfer, and other ancillary non-financial products targeted at low-income clients. Three features distinguish microfinance from other formal financial products:
The smallness of loans and savings,
absence or reduced emphasis on collateral, and
The simplicity of operations.
Microfinance banks typically give small loans, do not have asset-based collateral, and have a simpler operation when compared to commercial banks. Despite the rapid increase in the number of microfinance banks since the launch of the policy framework in 2005, available statistics do not suggest that they have significantly aided financial inclusion.
It is a fact that over 65% of the entire population of Nigeria has no access to banking services. Cofred can now reach out to the unbanned majority of our rural population and empower socially and economically, provide financial services to people generally excluded from traditional banking channels because of their low, irregular and unpredictable income, Provide soft loan to the poor clients, small entrepreneurs, market women, students whose parents are financially unable, encourage saving habits among the rural dwellers.