Terms of Reference for the Microfinance Advisory Board (MAB)

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Introduction

At the Microfinance Advisory Board Meeting held on Friday, 14th May, 2010, the members resolved that the Central Bank of Nigeria and the United Nations Development Programme should propose the Terms of Reference (TOR) for the MAB. This was to reflect the new mandate following the expansion of its membership to include all development partners in June, 2008.

Origin of MAB

The Microfinance Advisory Board was inaugurated on 10th October, 2005.  Its main objective was to provide policy guidance and support the implementation of the 4 year (2004-2007) United Nations Development Programme (UNDP) Project on Development of Sustainable Microfinance Sector in Nigeria. 

The members of the Board were:

• National Planning Commission (Chairman)
• United Nations Development Programme
• Ford Foundation
• United States Agency for International Development
• German Technical Co-operation
• World Bank
• National Poverty Eradication Programme
• Federal Ministry of Finance
• Nigeria Agricultural Cooperative and Rural Development Bank
• National Association of Small and Medium Enterprises
• Zenith Bank Plc
• Ecobank Plc
• Central Bank of Nigeria  (Secretary)

Terms of Reference for the Original MAB

To provide guidance and oversight to the Microfinance Programme of the UNDP. 

The specific responsibilities of the Board under the UNDP Project were:

• Approve proposed three year outputs and annual work-plans;
• Review proposed work-plan of the International Technical Services Provider (ITSP) on annual basis;
• Confirm the participating microfinance institutions based on the recommendations of the ITSP;
• Review contracts between the ITSP and participating organizations stating outputs to be achieved within specified time frames;
• Monitor achievements of participating organizations, and advise implementing agency on disbursement of subsequent tranches based on achievements and future work-plans;
• Ensure reporting requirements are being met;
• Instruct the implementing agency to contract annual audits of selected participating organizations, review completed audits, and ensure compliance with audit findings;
• Review evaluation to be carried out at the end of the first year (2005) of programme implementation and guide ITSP in implementing recommendations;
• Conduct monitoring visits prior to MAB meetings and as deemed appropriate.

Deliverable under the UNDP Project on Development of Sustainable Microfinance Sector in Nigeria

The Project achieved the following at the end of it’s 4-year life (2004-2007):

• Contributed to the drafting, printing of the Microfinance Policy and its launching.
• Provided an International Technical Services Advisor to the Central Bank of Nigeria.
• Provided Support for the establishment of the Microfinance Division in the Central Bank of Nigeria.
• Provided capacity Building for 3 NGO MFIs namely – Lift Above Poverty Organization, Benin City, Development and Exchange Centre, Bauchi and Justice Development and Peace Commission, Ijebu Ode.

The Project Completion Report in 2008 recommended that there was need to have a comprehensive Microfinance Development Strategy for Nigeria.  A National Working Group to develop the strategy has been constituted and a baseline survey in that respect was just concluded in May, 2010.

Expansion of MAB

At its 4th Meeting held on 13th July, 2007 (item 4 on the minutes of the meeting), it was suggested that the composition of MAB should be expanded to include all development partners that were intervening in the Nigeria microfinance sub-sector. This was to foster co-ordination of their activities, promote synergy and  enhance their performance.

Item 5 of the 6th Meeting of MAB held on July 3, 2008 approved the membership expansion. It also resolved that opportunities should be created for presentation of development partners microfinance programmes at its meetings.  New members were consequently co-opted as follows:

• Department for International Development;
• Japan International Co-operation Agency;
• United Nations Development Organization;
• Embassy of Peoples Republic of China;
• European Commission;
• Canadian International Development Agency; and
• African Development Bank.

Proposed Terms of Reference for Expanded MAB

Following the expanded membership of MAB, its terms of reference should be amended to provide guidance and over-sight on the microfinance programmes and interventions of members.  The Board will have the National Planning Commission as Chairman, the CBN as co-chair and an elected representative of members as the second co-chair.

Specific Responsibilities shall include:

• Define critical gaps in the microfinance sub-sector and recommend strategies for members’ attention.
• Create a forum for members and other interested parties to present their microfinance programmes.
• Make input and contributions for concept development, planning and review of members interventions.
• Call for strategies/annual work plans of members and take presentations on their implementation.
• Harmonize donor partner activities to ensure that they are complementary, efficient and effective.
• Prepare reports of the activities of partners for presentation at its Annual Microfinance Conference.
• Provide advise to the National Microfinance Consultative Committee on microfinance related matters.

Joint National Association of Microfinance Bank/Association of Non-bank Microfinance Institutions in Nigeria (NAMB/AMFIN)