HAB NO ­­­------------- Of    2008



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

BE IT ENACTED by the House of Assembly of Ebonyi State of Nigeria as
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

 (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.

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.

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.

 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.

 The administrative board
The Ebonyi State Micro Credit Scheme Administration Board (EMCAB) shall be charged with the day to day administration of the scheme.
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

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.

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.

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.

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.

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.

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.

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.

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.

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.                      . 

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. 

Qualification for the chairman
The chairman shall be seasoned in his chosen profession and shall have a minimum of a university degree. 

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. 

source of fund  
(1)     The fund for this scheme shall include but not limited to the
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.

Banks of the Scheme
The micro finance banks or any other banks in the state shall be the  participating banks in the scheme

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.

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

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.

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.

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.

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.

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.

 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.

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.

 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.

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

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)

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.

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      
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   .         
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.

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.

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.   

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.

Repeal of previous Laws
1.       This law hereby repeals supervised Agricultural credit scheme Edict,1998 and Fund for small scale industries credit scheme.
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