Walking Out of Poverty, Destitution

from All Africa

This Day (Lagos)

By Agha Ibiam
Lagos

Poverty has been said to be the greatest threat to human existence. In an attempt to empower the poor economically, the Lagos State Government recently launched various programmes including microfinance scheme for indigent people in the state.

Alhaja Modinat Atoro, a mother of four is a petty trader, an occupation she has been engaged in for the past five years. It is also the proceeds from that petty trading that she is using to support her family in Ifako Ijaye, Lagos. Since she sells such items that are daily needed in homes, she could not but accept that it is a moving business, only that the profit margin is low which can scarcely solve any meaningful problem. She admitted that the only problem she has is her inability to raise sufficient capital for the business.

Mr. Adams Agosu faces the same challenge of funds. He had been into artwork vending for the past 40 years. As a father of 10 children with two wives, who reside at Ajegunle, Apapa Lagos, he needs a robust business in order to meet up the challenges of maintaining his home. Agosu, who had an informal training on art works said he sells rubber stamps, engraving and award materials, plaques and other equipment used in designing. Just like Mrs. Atoro, Agosu's greatest challenge is how to build a capital base that will enable him sustain his business and to take care of his family.

Dapo Ademola is a taxi driver from Ekiti State. He's an upholstery maker by profession. He went into driving because he could not source money to buy a dressing machine for his wood work. Even the car he's driving was purchased for him by one of his friend's working in a construction company. He hopes to go back to his work by the time he pools some money to enable him buy the machine. But at the moment, taxi driving seems to be the only source of hope to him.

Nevertheless, to give hope to millions of poor men and women who are into petty business, but lacks funds to enlarge it, the Lagos State Ministry of Women Affairs and Poverty Alleviation, recently launched the Eko Micro-finance Scheme tagged, "poverty to prosperity". During the launch, Governor Babatunde Fashola of Lagos State noted that each time the state government fulfills another campaign promise; there is always immense joy in and satisfaction in his heart.

"Every promise kept strengthens the confidence of the people in the integrity of our words as a government. It deepens that trust between government and the people that is so essential for the progress of the society," the governor said. As the central policy thrust of the administration remains poverty alleviation and sustainable economic development, Fashola said his government is continuing on the policy direction of the immediate past administration, which is aimed at accelerating the pace and onslaught against poverty.

"Poverty is the greatest threat to human existence. Poverty anywhere is a threat to the collective security of society everywhere. Poverty imprisons human potential and erodes human dignity. It breeds the social vices and violent crimes that endanger our collective future," he said.

The scheme is designed in such a way that all indigent residents of Lagos who have skills or good business ideas but lack the collateral to access credit from commercial banks to finance their business will benefit from it. Towards this end, the state government has earmarked the sum of N350, 000 million as what the governor regarded as initial seed sum for the implementation of the scheme. It is hoped that the amount will grow the capital base of the micro-finance scheme through annual budgetary provision to a target sum of N5 billion within the next few years.

The modus-operandi that will be used to disburse the loan will be administered by the Lagos State micro-finance institution, through the services of enlisted micro finance banks and cooperative societies operating in Lagos. The micro-finance banks are expected to deliver credit/loans directly to borrowers at interest rate lower than the prevailing lending rate in conventional banks.

Five micro-finance banks have been short listed on merit to commence the programme based on verifiable criteria. These include financial capacity, staff strength, professional expertise and area of coverage. The banks will operate in three senatorial districts of the state. Those located at the Lagos West Senatorial district, will have Integrated Microfinance, Lagos State University Microfinance and Ojokoro Microfinance Banks at their service. Those on Lagos East Senatorial district will be serviced by Integrated Microfinance and Mic Microfinance Banks, while the Lagos Central Senatorial District has Integrated Microfinance and Gapbridge Microfinance Banks at their service. It is hoped that as the capital base of the scheme is expanded, the state government will continue to licence more microfinance banks to participate in the initiative.

Apart from petty business men and women benefiting from the scheme, it is also designed in a way that graduates of Lagos State Skill Acquisition centers will also have access and benefit from the scheme. As at today, they are about 4,000 trainees in eleven skill acquisition centers receiving tuition fee training for varying periods between six months and two years.

Mrs. Joke Adefulere, Commissioner for Women Affairs and Poverty Alleviation, said "it is an irony that despite the widespread awareness and concern, the level of mass poverty and deprivation has been aggravated nationally and globally." The objectives behind the scheme, Adefulere, said is to provide diversified, affordable and dependable financial services to the active poor, in a timely and competitive manner, which would enable them to undertake and develop long-term sustainable entrepreneurial activities.

As an expert in finance and economic matters, the Commissioner for Finance, Mr. Rotimi Oyekan, explained that the funds has been designed to provide reliable, affordable, patient wholesale funds for on-lending by microfinance business institutions; utilise the microfinance scheme as a major change agent and to partner with development finance organisations, international donor agencies and commercial social investors.

The design philosophy of the fund is aimed at maximising capacity building and providing the enabling environment for the growth of the informal sector and as a solution to the age-long incapacitation of overwhelming number of entrepreneurs in the state as regards sourcing of loanable funds for the sustenance and development of enterprises which are mostly small-scale in nature, the finance commissioner said.

Alhaja Atoro, who said she is hearing about the scheme for the first time, promised that she will give it a trial by applying. The loan when secured according to her will boast her business, and with that, her business will definitely have a leap. However, Agosu said should he secure the loan, he will use it to stock his office with sign materials and plaques. He said he will be more comfortable taking the loan if the interest rate is low than what the conventional banks offer at the moment.

Fighting poverty, Fashola said should not be regarded as doing the poor a favour. Rather, he said government is acting in the collective self-interest of the society. "Very often, we tend to perceive poverty as solely an effect of economic underdevelopment. In reality, poverty is also a very serious contributory causal factor to a society's lack of progress. The child that drops out of school and is denied an education due to poverty, for instance, becomes a liability rather than an asset to society," the governor said.

However, the governor urged beneficiaries to make efficient use of the loan facilities to enable them pay back on time and for others to benefit from the scheme.