Delta State Nigeria

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Micro-Credit Scheme

His Excellency, Dr. Emmanuel Uduaghan's administration places a lot of emphasis on Human Capital Development. One of the major platforms for achieving the set goals in human capital development on a sustainable basis is the Delta State Micro-Credit programme (DMCP).

Delta State Micro-Credit Programme (DMCP) is packaged to be a viable strategy for poverty alleviation. The key element of this strategy for poverty alleviation is to facilitate access of the economically weak and disadvantaged segments of the population to productive assets and services through a sustainable credit facility.

Delta State Micro-Credit programme (DMCP) therefore focuses on the interests of the people, with regards to their needs and also justification for the existence of such needs. DMCP is thus, a poverty alleviation programme designed to benefit the economically weak and must be carefully tailored to their needs.

  • The blueprint is however, the anchor for discharging DMCP responsibilities to Community-Based Programmes
  • Some of the critical indices we have endeavoured to build into the programme are

PROGRAMME INDICES

    • Harmonization of all major Micro-credit programmes in the state
    • Focus on economically weak persons
    • The Fund has been set aside as a specialized programme
    • The Programme is a public/private partnership between the Government of Delta State and Participating Financial Institutions (PFIs), i.e. Micro Finance Banks

Above all, we have adopted a bottom-up approach developmental model;

    • The choice for Micro Finance Banks as PFIs is because they are really community based banks
    • DMCP clients participate in the design, implementation and monitoring of the programme (the programme participants are called clients not beneficiaries)
    • The programme is not a social welfare or government hand-out
    • It is not a political settlement, neither is it a safety net
    • Government does not disburse money or give equipment directly to clients
    • The Delta State Micro-credit is currently disbursed through 28 Micro Finance Banks based in the state.

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Involvement of the PFI

    • The PFIs assist the Programme Office in
      • identifying the Cluster Groups (with a membership of not less than 10 persons and not more than 25)
      • perfecting the Cluster Groups
      • capacity building and mentoring
      • disbursement of funds
      • monitoring and evaluation
      • recovery and writing of the monthly reports on each Cluster Group
    • The loan is interest free
    • The State Government pays 8% administrative charges to PFIs
    • The outreach of the Programme is the entire state
    • The Programme cuts across gender
    • It is run without bureaucracy
    • It has been structured to be non-political and unattractive to the rich because programmes that are attractive to the rich will inevitably make the rich  crowd out the poor with their social connections
    • Communities participate in all aspects of the project cycle and have the responsibility of identifying and prioritising their own projects
  • The DMCP is therefore a pragmatic approach that  focuses on the interests of the mass of the people with a genuine consideration for their needs

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LIST OF THE 28 DMCP PARTICIPATING FINANCIAL INSTITUTIONS( PFIs)

S/N

PFIs

LOCAL GOVERNMENT AREAS

1

ASPIRE MFB

KWALE, NDOKWA WEST LGA

2

LANDROCK MFB

ASABA, OSHIMILI SOUTH LGA

3

BOJI BOJI MFB

BOJI BOJI, IKA NORTH EAST LGA

4

ADAIGBO MFB

OGWSHI-UKU,ANIOCHA SOUTH LGA

5

UBULU MFB

UBULU-UKU, ANIOCHA SOUTH LGA

6

ANIOCHA MFB

ISSELE-UKU, ANIOCHA NORTH LGA

7

IDUMUJE MFB

IDUMUJE UGBOKO, ANIOCHA NORTH LGA

8

MAINLAND MFB

IKA SOUTH LGA

9

EBU MFB

EBU, OSHIMILI NORTH LGA

10

ICB LLAH MFB

ILLAH, OSHIMILI LGA

11

UMEJEI MFB

IBUSA, OSHIMILI NORTH LGA

12

UNITED MFB

EFFURUN, UVWIE LGA

13

UVWIE MFB

EFFURUN, UVWIE LGA

14

MACROD MFB

UGHELLI, UGHELLI NORTH LGA

15

SOLACE MFB

EFFURUN, UVWIE LGA

16

CUB MFB

ASABA, OSHIMILI SOUTH.

17

OKPE MFB

OREREOKPE, OKPE LGA

18

DOLPHIN MFB

ENERHEN, UDU LGA

19

UGHIEVWEN MFB

OTUGHIEVWEN,UGHELLI SOUTH LGA

20

UNIFA MFB

UGHELLI, UGHELLI NORTH LGA

21

BROADBASE

BOMADI, BOMADI LGA

22

COASTLINE

OKERE, WARRI SOUTH

23

IC GLOBAL

OLEH, ISOKO SOUTH LGA

24

EAGLE FLIGHT

AJAMIMOGHA, WARRI SOUTH LGA

25

WETLAND

DECO ROAD, WARRI SOUTH LGA

26

IYEDE

OTOR-IYEDE, ISOKO NORTH LGA

27

CREEKLINE

SWAN ROAD, WARRI SOUTH LGA

28

AGBARHO MFB

ORHO-AGBARHO, UGHELLI NORTH LGA


Initial Challenges:

  • The elites (corporate, political and traditional leaders) would rather have had the Government hand over the fund to them to disburse and dispense at their pleasure.
  • The initial belief that the poor do not repay loans but statistics now show the contrary at DMCP
  • Apathy and cynicism at the early stage of the programme on the part of the people and prospective clients because of past failures in the execution of similar programmes
  • Getting the people to understand that Government money is their money and that the Government in power is holding it in trust for them.Getting the people to understand the need to guard and manage the fund diligently along with Government.
  • There was also the belief that the programme is a political settlement for the elites to disburse, but with DMCP, Government handed over the fund disbursement to PFIs
  • As far as they were concerned, the programme was just another in the series of government gimmicks
  • In order to reverse this apathy, the staff of the programme Office had to embark on a massive sensitisation and capacity building exercise with a missionary zeal
  • Happily, DMCP  has now been embraced across the three senatorial districts


DMCP has three (3) attributes:

    • Empowering of the grass roots population
    • Creating new wealth at that level
    • Reducing unemployment in the productive age bracket


 

Conditionalities for loans

    • The loans are micro
    • No collateral but group guarantee
    • Three months moratorium
    • Repayment in weekly or monthly installments, repayable in 52 weeks
    • Successful or even early repayment ensures eligibility for bigger loans
    • Quick income generating activities. Each cluster group is expected to maintain and sustain credit discipline through:
      • Peer Pressure and
      • Group solidarity

Loan Repayment

    • Each group is expected to maintain and sustain credit discipline through peer pressure and group solidarity
    • Money recovered at the end of the month is ploughed back immediately into the Programme to ensure continuity
    • Group repayment of loans, this is because the Group is the collateral; if one person defaults, the whole group is held liable
    • However, in the case of an act of force majeure like death, the PFI and the Programme Office rallies round the Group
    • This is because ultimately, the main objective of the Programme is to grow the economy of Delta communities

 

Loan Portfolio meets diverse development needs:

    • Joint enterprises
    • Small-scale industries
    • Cottage industries

 

 


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