The African Development Bank Group (AfDB) has granted a N2.364 billion ($12 million) credit facility to a Nigeria’s LAPO Microfinance Bank Ltd.
The bank, in a statement issued in Lagos on Wednesday said that the loan agreement, signed on Nov. 17, was to support inclusive growth in Nigeria.
It also noted that the facility would equally enhance local Small and Medium Enterprises (SMEs) in the country.
LAPO MfB is the largest microfinance bank in Nigeria with 1.1 million clients and 327 branches, currently operating in 26 out of 36 states in the country.
Given its history of a group-lending model based on a community-based approach, LAPO predominantly focuses on low-income households and women by providing an average loan size of N38,000 ($190).
“The corporate AfDB loan will support a proposed expansion project of LAPO MfB to achieve its goal to serve 5 million clients by 2017.
“It is focusing on low-income individuals (predominantly women) and micro/small enterprises by providing affordable access to finance, saving, credit and insurance in urban and rural areas.
“The MfB will also expand its geographic coverage and number of branches,’’ the statement read in part.
According to the bank, with loan, multi-faceted development outcomes are expected for LAPO MfB.
“It will increase the proportion of poor households and small businesses with access to financial services in Nigeria and its financial sector infrastructure, as it plans to expand their branch network.
“The funding will also stimulate product development aimed at meeting diverse needs of low-income households and local enterprises including a soft loan scheme to provide clients a more convenient and safe solar powered lanterns.
“It will also enhance financial inclusion of women and female entrepreneurs and support increased revenue of poor households,’’ the bank further stated.
In spite of its lower-income client base, LAPO’s total loan portfolio exceeded N40 billion ($200 million) in December 2014 due to its efficient decentralised banking model.
LAPO has achieved its goal to reach over 1 million clients by end of 2013, and is targeting to reach 5 million clients by the end of its five-year business plan (2013-2017).
It has 3,184 staff across 327 branches to prospect for new business and effectively serve its existing customers on the ground.