While Nigerians continue to wait for the new Central Bank of Nigeria directive on micro finance banks, more people, particularly the low income earners, have continued to fall victim to some of these dubious finance houses. The latest of these are traders at the Alaba International market and its environs who had deposited their money with Mustard Seed Micro-Investment Limited for several months, only to discover that they may never be able to get their money back.


"I started saving with them last three months," said Sunday Odo, a trader in electrical equipment at the market. "I started in August, and I have contributed for three months. I've been paying N1,000 daily. That is our agreement for each card. But I have two cards, making N2,000 every day. When I get to three months and two days, I heard that they have a crises. That is how they flew with my money."


Trouble started for the financial institution - located at suite 409, Ellington Electric House, Alaba International Market, Lagos - on Wednesday, October 28 at about 11.20 am when several customers invaded its branch office, destroyed some of its property and carted away others.


"Many of them came to our office to collect their money which was due to them. You know we do this six months savings thing? We told them we could not pay them their money, which is what we had been telling them for several days. Then they started to destroy our property. They attacked some of us. Even I just managed to escape, we had to tell our manager who was not around not to come near the office." said an official, who spoke on condition of anonymity.


Seeds of trouble


When contacted on phone, Sunday Ovuwakpoyeh, the branch manager, refused to respond to our enquiries.


The financial institution, which was incorporated in June 2006, has six branches in Lagos and some others in Delta State. All of its Lagos branches have been closed since October, as none of them could meet depositors' demands. Though the institution has several packages, the one most sought after by depositors is the daily savings plan called "micro debenture savings" that allows depositors to bank a particular sum daily for six months and then get a ten-percent interest on the total sum.


However, this was not to be as thousands of depositors funds have remained trapped in the bank. "I was investing for my mum, my mum didn't get her money before they disappeared," said Ogechukwu Ezeani, a trader in lightening materials at the market. "When you ask for your money, they will tell you that there is no money yet, or they'll postpone it till the next day, and the next day. She wanted to use the money during the December period."


Efforts to reach the top management of the firm proved abortive. Phone calls made to the phone number - which was secured from official documents - of its Chairman, Glory Abrefera was picked by a man who identified himself as a former personal assistant to Mr. Abrefera. "I was his former PA. I resigned from Mustard Seed months ago. That place has issues, but I cannot tell you anything about them," he said.


At the group office of the company at XYZ plaza, NEPA Road, Ajah, a security official told NEXT that the company closed very early for the year, about two weeks before Christmas. The company however put a notice (not on a letter headed paper) apologising to its customers. Moreover, a phone number put on the notice is also unreachable.


A senior official of one of its branches told NEXT that "our own branch is making profit. Same as other branches in Lagos. But the management were diverting our funds to their other businesses, particularly their fast food. We made this known to the Chairman when we met after we shut down. But, what can we do?"


The problems of Mustard seed are not peculiar. NEXT had, in previous editions, reported how several microfinance banks suddenly closed shop and disappeared with depositors funds. Some of these include Adif Microfinance Bank on 57, Lawanson Road, Lagos and PS Microfinance Bank Ltd, which was located on Ayo-Alabi Street, Ogba- Lagos.


As depositors (largely low-income earners) lose their fund, the Central Bank which is supposed to regulate the MFBS is still dragging its feet.


Confused regulators


Activities of Micro finance institutions are supposed to be regulated by the Nigeria Deposit Insurance Corporation (NDIC), and the Central Bank of Nigeria (CBN) which issues licenses to these banks. The CBN website listed 899 licensed micro-finance banks, but several others operate who are not on the list.


The NDIC, which is suppose to insure the bank's depositors' funds to the tune of 100,000 naira (irrespective of the amount invested), said it is finding it difficult to regulate these institutions. "Even when we write them letters, some of the mails are returned undelivered. We cannot locate some of these microfinance banks because of their wide spread across the country," said Jacob Afolabi, a deputy director at the corporation.


Efforts to get the CBN and NDIC to comment on the number of microfinance banks that have suddenly closed shop and abandoned depositors to their fate proved futile, as the CBN spokesman Muhammed Abdullahi refused to respond to phone calls and email enquiries, while the NDIC spokesman did not pick his calls.


However, Mr. Abdullahi had told reporters at a previous meeting that "Many proposals are being drafted towards strengthening the sector. All the problems that are rearing their heads are to be addressed soon."


This may come too late for the customers of Mustard Seed Micro Investment Limited and others in their shoes. "If God will help me to get my money, what will I do with them again. Even if I am foolish, I know how I laboured to get that money. I know how I suffered. I will never put my money in any micro finance bank again. But let them just help me get my money," Mr. Odo, another trader, said.