Your Nigerian Economist

Your Nigerian Economist

Inclusive growth lies at the heart of Nigeria's development. From macroeconomic policies to energy resources; trade to development topics, Your Nigerian Economist engages the citizenry in discussing relevant economic issues and proffers solutions towards a fairer, more developed economy.

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The Rise, Fall and Rise of the Anchor Borrowers Program

Mma Amara Ekeruche

Mma Amara Ekeruche

Amara works as a Research Associate at the Centre for the Study of the Economies of Africa (CSEA). She holds a BA (first class) in Economics from Kwame Nkrumah University of Science and Technology, Ghana and an MSc in Economic Policy from University College London.

Once upon a time, microcredit, the extension of financial services to those unable or unlikely to access traditional finance, was considered the silver bullet to poverty alleviation around the world.

The revolution began in the 1970s when the Grameen Bank provided financial services to small businesses that were too poor to access traditional banks in Bangladesh. With small loans at low interest rates and an account to store extra income, poor households were able to increase their earnings, create savings buffers and build assets.

Microcredit surged in popularity at the start of the new millennium as it seemed to lift millions of people out of poverty through the simple vehicle of financial inclusion. The United Nations declared 2005 as the "International Year of Microcredit" and in 2006, the Grameen Bank and its founder, Muhammed Yunus, were jointly awarded the Nobel Peace Prize.

Fast-forward to 2018 and microcredit has spread throughout the world. In Africa, microfinance institutions have extended their reach: from 3 million depositors and 3 million borrowers in 2002 to 20 million depositors and 7 million borrowers in 2012. But, despite this expansion and supportive government policies in mobile money and micro-insurance, financial inclusion still evades Nigeria. A 2016 Enhancing Financial Innovation and Access (EFInA) survey estimated that 42% of Nigerians are financially excluded.

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