The People’s Bank of Nigeria: Its Aims and Objectives

An address by President Ibrahim Baangida on the occasion of the Commissioning of the People’s bank of Nigeria, Ajegunle, 3rd October, 1989

Today is the dawn of a momentous era; a day the Federal Military Government has been looking forward to; a day when all our plans for national economic reconstruction and self- reliance are being given a focus and a concrete form at the grassroots; a day when the masses, the underprivileged people of this society, who find it difficult to meet the conditionalities of commercial and industrial banks, are given their own bank – the ‘’People’s Bank of Nigeria’’. I am, therefore, very pleased to be here today for the commissioning of this special Bank.

As indicated in my good will message to the nation two days ago, the establishment of the People’s Bank is a climax to the policy of the Federal Military Government to improve the self-sustaining capability of the teeming underprivileged masses. Those of us who hail from poor and humble families – and we, no doubt, account for the majority of Nigerians – know how hardworking, resourceful and resilient our parents were. Many would recall how, if just a little more money had been available at the time it was wanted, the trade or industry of our parents, brothers and sisters, would have flourished considerably. Lack of funds has very often caused the collapse of small businesses and the extinction of ingenious ideas before they could be translated into reality. With this Bank, all such frustrations to our hardworking, devoted and underprivileged masses would have come to an end.

I am delighted to be associated with the launching of this special Bank. As its name implies, the People’s Bank will, in both concept and operation, cater exclusively for the need of the ordinary Nigerian, especially the very poor in our society, who would normally not have access to loan assistance as currently operated in our conventional banks. It is in keeping with its policy of seeking to promote the welfare of our people, especially the ordinary citizens that this Administration decided to establish this Bank.

The main beneficiaries of the scheme will include all less privileged members of society who are involved in legitimate economic activates in both the urban and rural areas and who are sponsored by their various trade and professional groups. It is expected that, among many others, our road-side mechanics, self-employed technicians and artisans such as plumbers, vulcanizes, and electricians, petty traders, small-scale and peasant farmers, truck pushers, livestock and poultry keepers, tailors, barbers, hair-dressers, washer men and women, leather workers and all others who need financial assistance to improve their trade and economic well-being, will be fully assisted by the scheme. It is envisaged that, for the time being, the smallest amount that can be borrowed under the scheme by any individual will be fifty Naira while the maximum will be two thousand Naira. These figures are subject to review, depending on our findings and experience during this pilot stage. A minimal charge of not more than 5% will be made in respect of each loan, to cover overhead and administrative costs.

The intention of the scheme is to ensure that the loans from the Bank go to the really needy, for the improvement or expansion of the businesses in which they are already engaged. In this way, the operators of the Bank will not only be making sure that the loans are applied for the purposes for which they are given but also that they help in increasing productivity, and in enhancing the income generating capacity of the beneficiaries. Such development, at the low-income segment of society, will definitely have a very beneficial effect by boosting the overall productive capacity of the economy. As a corollary, more jobs will also be created.

Will the loans be repaid? The answer to this question is an emphatic ‘Yes’. Experience in those countries which have adopted this type of credit scheme has shown repayments of 80-95% within the one –year period in which such loans are usually given. Moreover, a similar scheme operated by a group of private Nigerians in the last few years has achieved a repayment performance that is reportedly over 90%. Furthermore, the ordinary citizen, especially in the rural area, remains honest and anxious to protect his or her name and family reputation. Finally, our people have been practicing the esusu system from time immemorial. The People’s Bank uses the same principle of group loyalty, group supervision and peer pressure to ensure that members discharge their obligations to avoid putting the chances of others in jeopardy. I have every confidence that you, the hardworking, honest but needy people of this country will surely repay the loans.

It may, perhaps, be wondered why such a new bank is considered necessary since government already has a policy of intensified rural banking. The answer lies in the fact the ordinary citizen, who is the target of this scheme, does not often qualify for   loans even at rural bank branches, either due to his inability to offer any collateral or simply because his financial requests are considered too small and too risky by the commercial banks. Under the People’s Bank lending programme, no collaterals will be demanded and formality and paper work will be minimal. What is  more, to avoid delays and frustrations, the services of the People’s Bank will be made available, not in conventional bank branches, but our in the field, where the beneficiaries normally carry on their businesses.

Besides emphasizing the fact that government cares for the toiling masses of this country, the People’s Bank is an indirect scheme for income generation and income re-distribution under this Administration’s economic recovery programme. With the minimum overhead and administrative charge of 5%, the onerous burden imposed on poor borrowers by money lenders will be substantially reduced.

The establishment of the People’s Bank should also be seen as complementary to the various efforts of this Administration to improve the economic well-being and enhance the living conditions of the rural and urban population and the low-income groups generally, through the activities of such agencies as DFFRI, NDE and MAMSER. Government’s efforts in the small –scale industrial sector, especially with the introduction of the National Economic Reconstruction Fund (NERFUND), are also aimed at improving the lot of the lower and middle – income groups. Contrary to what may be the views of cynics and detractors, this Administration believes that the economic and social well-being of the masses is the ultimate purpose of good government. Consequently, this Administration will continue to introduce and champion schemes and projects such as this one, which have the purpose of improving the well-being of our people.

Following the commissioning of the People’s Bank here today, the launching of the scheme will take place in the six States chosen for the pilot scheme, on Saturday, 7 October. Six communities in Lagos State and two each in Anambra, Benue, Cross River, Niger and Sokoto States have been chosen for the pilot stage which commences today and ends on 31 December, 1989. Implementation of this scheme will be extended to all the States of the Federation with effect from next January.

To my mind, Ajegunle is the best choice for the commissioning of this great bank. It is a community which contains people forms every part of this country. It is a melting pot of all our peoples. It teaches us the lessons of national unity and peaceful co-existence. It is also a commercial centre, full of hard-working and resourceful Nigerians. Indeed, there is hardly anyone in this nation who has no relation here in Ajegunle. Ajegunle has proved that poverty is no respecter of tribe, state or religion.

I wish to remind all those who are associated with this scheme, especially at this early stage, that they have a lot of responsibility to shoulder. They must realize that it is the attitude which they bring to bear on the scheme at this stage that will earn it confidence and respect and thus ensure its success and future expansion. Since the People’s Bank is not a conventional bank, the staff who will run it must develop a new and unconventional orientation that will endear  the project to the target population, most of whom might be unsophisticated in financial matters.

The staff of the bank must, therefore, ensure that their attitudes does not scare away, frustrate or intimidate those they are expected to serve with sympathy and understanding. They should realize that their role is that of pioneers who have the historic role and privilege of nurturing the new society of our dream, where, ultimately, everyone will be freed from basic wants and deprivation. For your part, you will have no reason to give any gratification to receive your loan from the officials. We must realize that any society where the few enjoy all the good things of life while the majority struggle for mere survival, is not a healthy society and cannot, therefore, endure. Accordingly, by creating the People’s Bank, this Administration has taken one more positive step in the direction of establishing an enduring and just society.

To our beloved people, our brothers and sisters, the teeming masses who form the majority of the population of the country, and for whom this bank has been established, I say:

dis an una bank o!

make una use am –well o.

make una queue turn-by-turn.

Una go fit borrow money.

Una go fit trade proper

gain go boku.

Chop go better

Hungry go commot.

Suffer suffer go end.

Nigeria go better.

Ladies and gentlemen, it is now my pleasure and historic duty to launch the People’s Bank of Nigeria for the benefit of the masses of this nation and the creation of a just and self- reliant society.