LAPO Microfinance Bank champions sustainable finance

LAPO Microfinance Bank Limited, a pro-poor financial institution, is championing the cause of sustainable finance in the industry, amid a low adoption globally for this banking model.

The adoption of sustainable banking principles by banks, discount houses (merchant banks) and development finance institutions was approved by the Central Bank of Nigeria (CBN) in agreement with Bankers Committee in 2012.

The aim of this was to deliver positive development impacts to society while protecting the communities and environments in which financial institutions and their clients operate.

“I believe that LAPO champions the move for sustainability in the environment,” said Uche Olowu, president/chairman of council, Chartered Institute of Bankers of Nigeria (CIBN).

READ ALSO: Nigeria’s first education microfinance bank partners Lagos State to provide low cost funds

“The way we look at it from CIBN is how you direct your efforts to clients that are in the vanguard of sustaining the environment. How do environmental, social and governance risks are modelled to make sure that we sustain the environment,” he said.

Climate change is a big problem, he said. “How do we need to continually fund the degrading environment? We direct finance and manage our risk in such a way that we continue to push for sustainability in the environment”.

Kenneth Amaeshi, Chair in Business & Sustainable Development University of Edinburgh, United Kingdom, who delivered a keynote speech on ‘Rethinking Sustainable Development Goals (SDGs) as an investment opportunity’, at sustainable finance conference organised by LAPO in Lagos, noted that uptake of sustainability is low in the global financial sector.

He said Sustainable Development thinking and practices help to minimise risks and explore opportunities. Risk minimisation and opportunity exploration are both important for immediate and long term success.

Godwin Ehigiamusoe, managing director/CEO, LAPO, said the conference with the theme, ‘Enhancing Sustainable Finance in the Microfinance Subsector’, was organised to promote the practice of sustainable finance and banking values, especially among microfinance banks.

“Microfinance industry is growing, having a large number of institutions and also considering the nature of their clients who are obviously active on the environment, I feel there is a need for microfinance banks to adopt some of these principles as LAPO has done for the past six years,” Ehigiamusoe said.

He said the bank had achieved paperless transactions in all its board meetings, management meetings, review meetings and has also decided to track the volume of paper that would have been used in all these. If the savings are expressed in monetary terms, it would be discovered that LAPO has saved millions of naira in doing that.

“Because we are tracking we have been able to ascertain how much we are saving on monthly basis especially if we put in the cost of digital devices we still make some profit.

The second thing is that if you also look at the social dimension, supporting the people you do business with for instance LAPO has priority in recruitment of children of our customers,” he said.

On his part, Marcos Eguiguren, executive director, Global Alliance for banking on values (GABV), said, “I think it is a great milestone for Nigeria to have a bank such as LAPO organising a conference on sustainable finance especially with a focus on microfinance industry that is why we are supporting this. The role of our alliance is to support all actions in the world that are promoting sustainable finance and more for the economy”.