By Desmond Ejibas
Port Harcourt – The Niger Delta Development Commission (NDDC) Staff Cooperative Investment and Credit Society Limited has commenced the process of floating a Microfinance Bank in the country.
Mr Essien Franklin, President, NDDC Staff Cooperative, disclosed this on Wednesday while presenting roadmap for the formation of NDDC Cooperative Microfinance Bank Limited at a sensitization workshop in Port Harcourt
He said the cooperative seeks to raise N250 million to part-finance the establishment and operation of the bank as well as acquire over N4 billion loan owed commercial banks by NDDC staff members.
“The bank is offering the subscription by way of private placement of N250 million ordinary shares of N1 each at N2 per share for formation of the bank.
“NDDC Cooperative will retain controlling interest of minimum of 60 per cent of the total share structure of the bank, while 40 per cent will constitutes minority interest equity-holdings.
“The setting up of the bank is for sociology-economic empowerment of NDDC workers and the larger society.
“The net proceeds of the offer will be utilised for the registration, licensing, setting up of banking office and working capital,” he said.
Franklin explained that the cooperative would raise N150 million representing 60 per cent while the public would invest N100 million in a shareholder equity funding structure.
He said the bank would take-off fully in Port Harcourt in January 2021 after both shareholders had raised the statutory minimum N250 million benchmark.
“Subsequently, we hope to transform to a state and national microfinance bank after recapitalizations to the tune of N1 billion in 2025 and N5 billion in 2030.
“The bank intends to buy over part of NDDC staff’s estimated N4 billion loans owed commercial banks as well as reduce interest rates to lessen the financial burden on members.
“Also, the bank will give micro credits to the poor in the society, especially as the commercial banks are not too willing to grant non-asset base collateral credits, among others,” he added.
Mr Mike Baba, Assistant Director, Financial Policy and Regulation, Central Bank of Nigeria (CBN) said the apex bank was solidly behind the NDDC Cooperative Microfinance Bank.
He said the central bank would provide needed support to enable the microfinance bank to achieve its set objectives as well as enable investors profit from their investments.
“So, the CBN is glad with intention by NDDC Cooperative to float a microfinance bank. Microfinance Bank is one of the veritable tools that easily yields dividends for investors,” he said.
Also speaking, NDDC’s Acting Managing Director, Dr Joi Nunieh, pledged to work with the Federal Government and other stakeholders to reshape and reposition the commission.
She said the floating of the Microfinance Bank was coming at the right time when hard decisions were being taken to reset the trajectory of NDDC.
“So, this initiative will not only touch the lives of NDDC staff but would also expand the frontiers of opportunities for the people of the Niger Delta region,” she expressed optimism.