The recent decision of the Central Bank of Nigeria (CBN) and the Bankers’ Committee to transform the comatose Nigerian Postal Service (NIPOST) into a National Microfinance Bank calls for an urgent rethink.

The Governor of the Central Bank and Chairman of the Bankers’ Committee, Mr. Godwin Emefiele, gave three reasons for the decision:

Non-disbursement of intervention funds to Micro, Small and Medium Enterprises (MSMEs).
High and “outrageous” interest rates charged by existing microfinance banks.
Need to revamp the nation’s moribund postal services system.
Under the proposal, the Bankers’ Committee will invest N5 billion in equity from its N60 billion Agricultural Small and Medium Enterprises Investment Scheme (AGSMEIS) Fund while NIPOST would contribute its offices in the 774 local governments across Nigeria.

While the three problems pinpointed by the apex bank and the Bankers’ Committee are real and deserve to be addressed, the proposed solution raises some concerns.

Microfinance institutions aim to bring financial services to people who otherwise wouldn’t have them. Their purpose, therefore, is to extend financial tools to those who otherwise would not have access to them.

A for-profit microfinance bank operates about the same way as deposit money banks, although with differing criteria for opening accounts and securing loans.

On the other hand, the functions of a post office are:

Sale of stamps and envelopes.
Sending and receiving of telegraphic messages.
Sending and receiving of money orders.
Receiving and delivery of mails and related packages.
In some parts of the world, beyond their core service, post offices also offer such services as providing and accepting government forms (like driving licence and passport applications), processing government services and fees (like road taxes), and banking services (like savings accounts and credit transactions).

Where is the chemistry between the post office and the bank, in this search by the CBN and the Bankers’ Committee, to cure the ills of the microfinance banks?

The National Association of Microfinance Banks (NAMB) accuses the CBN of blaming the victim, when it makes the point, albeit correctly, that the microfinance banks charge high interest rates and don’t disburse cheap funds. However, the Association reminds the CBN of its obligation under the Revised National Microfinance Policy which provides as follows:

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