EBONYI STATE HOUSE OF ASSEMBLY
HAB NO ------------- Of 2008
A BILL FOR
A LAW TO ESTABLISH A MICRO CREDIT SCHEME AND ITS ADMINISTRATION
IN EBONYI STATE AND INCIDENTAL MATTERS THERE TO
Long title.
A Law to establish
a micro credit scheme and its administration in Ebonyi
State and matters
incidental there to.
Short title.
The short title is
the Micro Credit Scheme and Administration Law 2008
Enactment
BE IT ENACTED by the House of
Assembly of Ebonyi State of Nigeria as
follows:
SECTION 1. This law may be cited as the Micro
Credit Scheme and
Citation and administration law 2008, and shall be deemed
to have come into Commencement force on the…….day
of 2008.
SECTION 2
Interpretation
In this law, unless the context otherwise
requires:-
Clients
Record Card – means a card kept by the scheme which should be signed by beneficiary upon collection of the
loan.
“Collaterals” means surety or guarantee for
something to be put down as a fall back in the event of non pay back.
“Credit” means the money being advanced to
beneficiaries as loan.
“Frame work” means structure and modalities of
things
“MFB” means micro finance bank
“Micro” means small, little
“Rescheduling” means rearranging the terms and
conditions of the credit earlier granted.
“Scheme” means the scheme that would address the
credit needs of the people of Ebonyi
State.
“Seed money” means money in the pool of the scheme.
“Target population” means both the rural and urban
people of the state.
“the board”
means the micro credit administration board
“The State” means Ebonyi State
SECTION 3
Establishment
(1) There
is hereby established for the state a body to be known as the Ebonyi State
Micro credit Scheme, herein after referred to as “the Micro Credit Scheme”
(2) The micro credit scheme shall be a body corporate
and shall have power to sue and be sued in its corporate name and to hold,
acquire, dispose immovable property.
(3) It shall have a common seal, perpetual
succession, and shall be responsible to the Government.
(4) It shall be managed by a board to be known
as Ebonyi State Micro Credit Scheme Administration Board (EMCSAB), herein after
referred to as the micro credit Scheme board.
SECTION 4
Purpose
1. The purpose of
this scheme shall be to create in the state, a pool of financial resources;
that will provide assistance in the establishment, reactivation, expansion,
maintenance and modernization of viable agricultural enterprise to meet the
credit needs of the target population.
2. It
shall also be for poverty reduction and economic empowerment of the poor in the state.
3. It shall also
encourage experimental programmes aimed at introducing new environment farm
experiment that have proved successful elsewhere.
SECTION 5
scheme‘s target
1. The scheme is targeted at the rural and
urban poor segments of the population who are marginalized and denied access to productive assets such as
land, credit and extension services because they lack collaterals:
2. It shall focus more on the following:
a.
The productive rural poor especially
women and young school leavers.
b.
The productive urban poor especially
the artisans and youth unemployed.
c.
Small holder farmers
d.
Micro entrepreneurs like traders’
union/ association.
e.
Disabled people and other
disadvantaged population
f.
Cooperative thrift/ societies etc.
SECTION.
6
Scope of the Scheme
1. The scope of
this scheme covers every productive activity in the state; which shall include
but not limited to;
a.
Agriculture, fisheries, poultry
farming, cash crop production; Piggery, etc.
b.
Agro processing and allied activities
such as rice, cassava Sonya beans, palm oil, honey, etc.
c.
Commerce and industry, quarrying
mining, trading
d.
Income and employment generate
activities.
SECTION 7
The administrative board
The Ebonyi State
Micro Credit Scheme Administration Board (EMCAB) shall be charged with the day
to day administration of the scheme.
SECTION 8
EMCAB member ship
1. The Ebonyi State micro credit scheme
administration board shall have the
following as members:
a.
An individual invited on his own merit
as chairman.
b.
A representative of the governor’s
office.
c.
A representative of the ministry of
finance as a member.
d.
A representative of the ministry of
Agriculture.
e.
A representative of the ministry of
Commerce and Industries.
f.
Chairman of ALGON in the State or his
representative member.
g.
One person (preferably a woman) to
represent all the NGOS in the State.
h.
One representative each from two of
the participating MFBS as members
SECTION 9
Powers of the
board.
1. Where in the opinion of the board that a
sum, being the whole
or part of a credit
made by the board has not been applied for
the purpose for which the credit was made ,the board may order that the
sum be repaid to the scheme within the time mentioned in the order, and the sum
so ordered to be repaid shall thereupon become a debt due to the scheme.
2. On the death or dissolution as the case
may be of an individual or co-operative whose credit has not been paid fully to
the scheme, an officer or authorized agent of the scheme shall have power at a
reasonable and convenient hour to enter any premises where chattels and other
assets purchased or deemed to have been purchased in whole or in part with credit
granted under this law are stored and take inventory of the chattels and other
assets with the person who has custody thereof.
3. Such officer or authorized agent of the
scheme shall thereupon call the administrators or personal representatives of
the co-operative or individuals as the case may be to refund the interests then
accruing; upon his failure to comply with this demand, the board shall apply to
the court for an order of sale of the chattels and/or other assets of the
individual or co-operative.
4. The proceeds shall be used to recover the
balance of the credit and the interest accruing therein, and the balance
thereof shall accrue to the estate of the deceased or to the account of the
co-operative.
SECTION 10
Accounts, audit &
report.
1. The board shall keep a proper account of
all moneys that came
into the scheme.
2. Prepare an annual statement of account
conforming with a the acceptable financial standard.
3. The account of the scheme shall be audited
by the Auditor-General who shall submit same to the Executive Governor.
4. The board
shall not later than sixty days after the end of a financial year, submit
to the governor a report together with a copy of the audited accounts covering
its operations that financial year.
SECTION 11
Restriction of
execution against the property of the scheme
1.
In any action or suit against the
scheme, no execution of attachment or
process in the nature thereof shall be issued against the scheme, but any sums
of money which may be awarded by the judgment of any court against the scheme
shall, subject any directive given by the court, where notice of appeal has not
been given by the court, where notice of appeal has not been given by the scheme
in respect of the said judgment, be paid by the scheme from the funds of the
scheme.
2.
No suit against the
scheme, its board or agents for any act done in pursuance or in execution of
any law or of any public duty or authority or in respect of any alleged neglect
or default in the execution of such law, duty or authority shall lie or be
instituted in any court unless it is commenced within three months next after
the act, neglect or default complained of or, in the case a continuing damage
or injury, within the three months next after the ceasing thereof.
3.
No suit shall be
commenced against the scheme until one month at least after written notice of
intention to commence same shall have been served on the scheme by the
intending plaintiff or his agent, and such notice shall clearly and explicitly state the cause of
action, the particulars of the claim, the name and place of abode of the
intending plaintiff and the relief which he claims .A notice under this sub
section shall be deemed to be due compliance with the requirements of sub
section 2 of this section.
SECTION
12
Notices
The notice referred
to in the last preceding section and any other notice or other documents which
may be served upon the scheme under the provisions of this law or any other law
may, unless in any case there is expressed provisions to the contrary, be
served by delivering the same to the secretary or by registered post addressed
to the secretary or any other principal officer of the scheme.
SECTION 13
legal representation
In any suit by or
against the scheme, the scheme may be represented in court at any stage of the
proceedings by a legal practitioner or a law officer; and a servant of the
scheme authorized by the chairman of the Board.
SECTION 14
Not criminal suit
In this section
“suit” includes any action or any civil proceeding commenced by a writ of
summons or in such manner as may be prescribed by rules of court especially
pertaining to a credit granted under this law, but does not include criminal
proceeding.
SECTION 15
Obstructing the
board
Any person who
obstructs the chairman, officer or authorized agent of the board in the
execution or enforcement of any provision of this law is guilty of an offence
liable, on summary conviction to a fine of N5,000.00 or to imprisonment for two
years, or both.
SECTION 16
Offence of applicants.
An applicant for a
credit under this law who:
a. makes to the
board a material statement which he knows to be false or does not believe to be
true; or
b. with intent to
defraud ,fails to disclose to the board material information within his
knowledge, is guilty of an offence and shall be liable, on summary conviction,
to imprisonment two years or a fine of Five thousand Naira (N5000.00) or both.
SECTION 17
Corruption in Connection
With the credit
A member, servant
or agent of the Board who corruptly accepts or
agrees to accept, or
obtain from any person any property or benefits of any kind for himself or for any other
person in respect of or in connection with a credit under this law, is guilty
of an offence and shall be liable on conviction to imprisonment for two years
or to a fine of Five thousand naira (N5000.00) or both.
SECTION 18
Appointment of chairman
& members of EMCAB
1. The chairman of this board, shall be the accounting officer; and as well
as the members, shall be appointed by the Governor. .
SECTION 19
Secretary and Secretariat
There shall be a
secretary for the scheme who shall also be appointed by the Governor.
2. There also shall be a functional office for
the scheme within the city of
Abakaliki, with enough supporting staff.
3. The office shall serve as the secretariat of
the scheme, and shall also have sound vehicles.
SECTION 20
Qualification for
the chairman
The chairman shall
be seasoned in his chosen profession and shall have
a minimum of a university degree.
SECTION 21
Tenure of office
1. Except, where a
member vacates his office pursuant to section 13 of this law, a member shall hold office for three years
with effect from the date of his inauguration and he may be re appointed for
another term.
Section 22
Remuneration of members
1. A member shall be paid salaries and
allowances as shall be approved by the executive council from time to time,
provided that it does not amount to double payment to the member by the same
government.
Section 23
Loss of Membership
A member or
chairman shall loose his membership if:
a.
He /she resigns
b.
Dies or becomes incapacitated by any
reason whatsoever
c.
He/she
is convicted by a court of competent jurisdiction of a crime involving fraud or
dishonesty.
d. He/she could be removed by the Governor
Section 24
Proceedings etc of
Credit Board The micro Administration
Quorum
1. The EMCAB shall meet for the conduct of
the business at such times, places and on such days as the chairman may,
subject to
2. The chairman shall preside at all
meetings of the EMCAB but in his absence, the members present shall elect from
among them, the presiding officer.
3. If the chairman
is on leave, or absent for a long time, for reasons of illness etc, the
Governor may appoint any member of the EMCAB to act as chairman for any
specified period not exceeding six months.
4. The quorum for
meetings of EMCAB shall be five members including either the chairman or the
secretary.
5. Subject to this
section, the EMCAB, shall have power to
set up sub committees, regulate its proceedings and; may with the approval of
the executive council, make standing orders with respect to holding of meetings
and other matters related there.
6. The chairman
shall in the case of an equality of votes have a casting vote in addition to
his deliberative vote.
7.
The validity of proceedings of EMCAB
shall not be affected by any vacancy in its membership or by any defect in the
appointment of a member.
SECTION 25
source of fund
(1) The fund for this scheme shall include but
not limited to the
following:
a.
The Government grants and subventions
b.
All moneys held by or on behalf of any
previous scheme similar or related to this, established by any law in the
state; however acquired or whosesoever lodged.
c.
Any other investment of loan or funds
from finance and banking institutions.
d.
Any sum earned or arising from any
property acquired by or vested in the scheme.
e.
Any sum which may be granted to ,or
investment in the scheme by a statutory corporation or a limited liability
company;
f.
The interest accruing from the fixed
deposit accounts of the scheme in various banks;
g.
Moneys accruing to the scheme by way
of endowments, grants or gifts;
h.
Moneys accruing to the scheme from
other sources whatsoever.
2. All
moneys comprised in the scheme shall be deposited with the participating micro
finance banks, in accounts which may be opened for the purpose of the scheme.
SECTION 26
Banks of the Scheme
The micro finance
banks or any other banks in the state shall be the participating
banks in the scheme
SECTION 27
Functions
i. The banks shall serve as intermediary
entities for over all capacity building
of the benefiting groups.
ii. They shall
ensure the sustainability of the scheme.
iii. They shall
contribute to the pool of fund as may be prescribed by the Board.
iv. They shall
disburse the fund approved and released by the micro credit administrative
board to the beneficiaries.
v. Shall be
responsible for the recovery of all credit granted to beneficiaries.
vi. They shall
prepare a clear plan for strengthening the capacities of the target groups to
enable them pursue on their own, mutually beneficial relationship directly with
other banks or financial institutions.
SECTION 28
Eligibility of MFBS
I. Every participating micro finance bank shall
be incorporated as a legal entity;
and must have been operating as a micro finance bank.
ii. Shall have
presence in the target communities
iii.
Shall provide evidence of quality knowledge, and understanding of social processes and other cultural factors
involved in credit transactions in the target communities.
iv. Shall demonstrate credible record of previous
experience in credit management in poor communities.
v.
Shall provide good record in credit
recovery.
vi.
Shall possess an excellent governance
organogram; showing governing council, Board of Directors, etc and staff
strength of not less than Five (5) employees.
vii.
Shall have a clear vision and mission
geared toward effective service delivery and accountability.
viii.
Shall have qualified staff to offer
advisory and monitoring support to the benefiting groups
ix.
Shall also set up information system
to keep track loan disbursement and recovery.
x.
Shall be willing and able to train the
benefiting groups and their umbrella associations in credit administration.
Simple banking management, practice, micro enterprise management, group
mobilization and participatory approach to solving development oriented
problems.
X1 Shall
submit quarterly reports to the implementation
committee on the
progress of the credit scheme in each of the
participating community
SECTION 29
Appointment of MFBS
1.
Upon application, perspective MFBS will be
accessed, recommended and appointed by the Board
2. One
MFBS will be short listed from each Local Government in the order of priority
based on eligibility.
3
A micro finance bank or any other bank
will be appointed to act as a holding financial institution for the seed or
pool money.
4
Every selected MFBS shall sign a
memorandum of understanding (MOU) with the state Micro Credit administrative
Board
5
The commissioner for Economic
Empowerment and Poverty Alleviation shall endorse this memorandum of
understanding.
SECTION 30
Functions of MFBS
1. Every MFBS selected shall be entrusted
with the following function:
a. Identify relevant skill gap(s) in the
target groups and undertake training to address them.
b.
Provide advisory support to the
benefiting groups and the communities in the identification of projects that
are eligible for loans and in the processing of loan application.
c. Liaise with the implementation committee
to facilitate disbursement of approval loans to the beneficiaries
d. Liaise with every relevant group(s) to
monitor credit recovery.
e. Prepare
quarterly work plan with of specific activities and
targets necessary
to actualize the objective of the scheme.
Submit this plan to the implementation committee for approval.
f. Submit a comprehensive quarterly
financial and monitory reports to the administrative
Board.
SECTION 31
Remuneration Of MFBS
1. Every participating MFB shall be entitled to 3
percent of the interest that accrues from each credit repayment.
2. Each
participating MFB shall also have access to the fund approved by the administrative
Board for capacity building subject to the detailed work plans submitted to the
implementation committee quarterly.
SECTION 32
Grant of
credit
1 The Scheme may grant credit to any
individual or group engaged in the
programme in the state.
2. Every individual or group who wishes to
obtain a credit from the scheme shall apply to the board.
3. An application for a credit shall be made
in a prescribed form; and comply with other directives as may be directed by
the board.
SECTION 33
Beneficiaries Criteria
1. The
beneficiaries shall be the channels through which the scheme will operate.
2. Individuals can also benefit from the
scheme.
3 The
credit administrative Board shall prescribe the criteria for beneficiaries.
SECTION 34
Ceiling
1. There shall be a ceiling to the credit
grantable to every group or individual applicant.
2.
The maximum amount an individual shall
get is N250, 000.00.
3.
A group or co- operative shall not get
more than N1,000,000.00
4.
The actual amount shall be determined
by the board; and the criteria shall include but not limited to.
a.
Availability of fund
b.
Nature of investment concerned
c.
Viability of a proposal
d.
Business plan etc.
SECTION 35
Amortization
Period
1.
Credits shall be granted for a maximum
of one year.
2.
The actual amortization period for
each loan shall depend on the gestation period required for the investment to
start yielding return; and on a proper assessment of the nature of the
business.
3.
There shall be a grace period of three
months allowed to the beneficiary before he shall be expected to commence
repayment; in the case of those involved in marketing and processing
activities.
4.
A grace period of six months shall be
allowed to those that are involved in production like manufacturing
agriculture, handicrafts, exportation, mining, etc.
5.
It shall be an offence for any
beneficiary to default in the repayment of his loan as and when due.
6.
Any defaulter shall be guilty of an
offence of dishonesty and shall be liable to two years imprisonment or a fine
of N10,000 plus 10% interest on the total sum per month if an individual.
7.
A fine of N50,000,plus 20% interest on the total sum
per month if a body.
8.
A defaulter may be liable to both the
fine and prison term.
SECTION36
Mandatory
savings
1. All the loan beneficiaries shall maintain
savings in their
Account, either
collectively or individually with the participating micro finance institution.
2.
The amount in the savings shall always
remain at least 10% of the value of their loan throughout the period.
SECTION 37
Interest rate
1. Interest rates in this scheme shall be
determined by thegovernment on the recommendation of the administrative board.
2.
These rates are to cover
administrative charges and defray the emoluments of participating micro finance
institution.
3.
The rate accruing to the micro finance
institutions shall be 3. % of the interest.
4.
The balance of interest from the loans
shall accrue to the scheme’s revolving fund.
SECTION 38
Monitoring of
loan beneficiaries
1. The micro finance institutions shall
monitor every loan that is disbursed to ensure that it is paid back.
2. The administrative board shall also monitor
the performance of the MFBS regularly. There shall also be a combined
performance evaluation monitoring team.
3.
This team shall include representative
of the MFBS and the Board
SECTION 39
Approval of
loans
1. Credit application shall be appraised by
the Board through any sub-committee which it may set up for this purpose.
2. Besides eligibility criteria, the
following factors shall be noted:
a.
socio-economic status of the group
b.
saving record as a group
c.
regularity of group’s meetings
d.
size of loan requested in relation to
the activity
e.
credit worthiness of applicant(s)
SECTION 40
Disbursement Of
credits
1. Disbursement of loans shall take place
after a satisfactory documentation and fulfillment of all requirements.
2. The group representative’s or individual
shall acknowledge receipt of the loan by
signing the Credit Record Card.
3.
The micro finance Bank shall disburse
the loan and issue the beneficiary with a pass book which shall bear the
borrower’s account number as contained
in the letter of credit offer.
4.
The passbook shall contain.
a.
Entries on loan disbursement
b.
Repayments made (c).Group savings
standing
d. Withdrawals and dates.
5.
It shall also serve as a check on
entries of transactions
6.
It shall equally complement the client
records card(CRC)
7.
Individuals shall be issued with pass
books as well as groups.
SECTION 41
Repayment Of the
loan
1. The beneficiaries shall make repayments
directly to the MFBS, who shall issue
them with an acknowledgment.
2. The MFBS will then submit to the scheme’s
secretariat every month, the repayment records with details. The detail shall
include:
a.
Name of the group or individual
b.
Community/ LGA.
c.
Date of repayment
d.
The amount paid
e.
The amount paid back into the accounts
of the seed fund with the participating bank.
SECTION 42
Rescheduling
1. There
may be a rescheduling of loan.
2. Where this occurs, a loan amendment form
shall be drawn up by the MFB for the group.
3. The bank shall then cosign the form
4. Copies of these documents shall be sent
to the Board
SECTION 43
.
Reporting
1. There
shall be a quarterly detailed report prepared by the MFB showing the
performance of the fund and shall be submitted to The Board
2. This
report shall provide information on fund utilization by beneficiaries.
3. It
shall also provide information on problems and prospects of the scheme.
SECTION 44
Field visit reports
1. There shall also be an on the sport or
field visit reports.
2. This shall be carried out by the
consultant
3. After these several visits, the
consultant shall prepare a monthly field visit report for at least a period of
eighteen months and send to the scheme’s secretariat for internal use.
4. This report shall contain among other
things:
a.
Details of the approved projects
b.
Actions taken to assist the group or
individual.
c.
Implementation problems and possible
ways of solving them.
d.
Other relevant matters.
SECTION 45
Quarterly activity report
1. There shall be a quarterly activity
report.
2. This report shall be prepared by the MFB
for the Board
3.
It shall contain the following
details:
a.
The number and value of loans approved
in each Local Government Area and or development centre, both new ones and the
total.
b.
The number and value of loans approved
in each sector e.g. Agriculture, manufacturing, commerce, industry, etc.
c. Payment
collected in respect of each loan granted compared against targeted collections
for the quarter and the cumulative collections.
d. Loan recovery rate per Local Government.
e. Sex and age distribution of applicants
and beneficiaries.
SECTION 46
Quarterly and annual report
1. There
shall be a quarterly and annual valuation report to be
prepared
by the Board.
2. The Board shall submit same to the
Governor and the Executive council of
the State.
SECTION 47
Amendment
Objects and reason
1. This law shall be subject to amendment after
every three years, or as shall be recommended by the state executive council.
2. This bill seeks
to establish a micro credit scheme and its administration in Ebonyi State and to
provide for incidental matters thereto.
SECTION 48
Repeal of previous
Laws
1. This law hereby repeals supervised
Agricultural credit scheme Edict,1998 and Fund for small scale industries
credit scheme.