The microfinance sector in Nigeria and many other countries has more recently been much more criticized for its interest rates. It is alarming that this is not just the opinion of a few, as in the past, but becomes a more or less general perception among citizens, current clients and potential clients. Such perception, and even more an increasing trend, would significantly undermine the sustainability of the microfinance sector, in the medium or long run.

In a proactive view, the Efficiency and Social Performance Working Group of the NMP seeks to address these reputational issues through different activities e.g. conducting baseline surveys on efficiency and ensuring implementation of recommendations from the survey. It appears evident that such reputational issues cannot be sorted out any longer by a single institution but require a joint action by microfinance practitioners.

Objectives of Working Groups

• This working group of the NMP focuses on systematically determining the acceptable mechanism to measure efficiency of microfinance institution in Nigeria. The outcomes of this working group’s activities will form the basis for which an acceptable efficiency mechanism would be proposed for industry use which will in turn re-instate the social performance objective of microfinance banks.