450 Microfinance Banks Approved
By January 1, 2008, only 450 out of a total 700 community banks across the country would operate as Microfinance Banks to cater for the needs of the micro, small and medium-scale enterprises, the Central Bank of Nigeria (CBN) said yesterday.This was made known in Calabar at the ongoing 6th Annual Seminar of the Nigeria Deposit Insurance Corporation (NDIC) organised for Finance Correspondents and Business Editors.
The apex bank had in December 2005, announced a new Microfinance framework.Under the regulatory guidelines, Unit Microfinance Banks are expected to have a minimum of N20 million capital base, while the State Microfinance Banks are required to beef up their capital base to the tune of N1 billion. Licences of those that are unable to scale through the recapitalisation exercise are to be revoked.
As at end of last month, about 407 have already been given licence to open and commence business along side four non-governmental organizations (NGOs) and its expected that by the December 31, 2007 deadline, the remaining 250 community banks that are unsuccessful would have their licences revoked by an exit strategy that is being worked by the CBN and NDIC in order to create a soft-landing for the institutions and instil confidence in depositors.disclosed already about 150 community banks out of the 250 that are unlikely to meet the deadline have closed down even before the commencement of the consolidation exercise in the sub-sector.He however assured of CBN’s commitment in ensuring that depositor’s funds in the remaining institutions are protected. “The CBN and NDIC are working out an exit strategy for these institutions in a way that we will not hamper depositors confidence.The CBN intend to run a certification programme for operators and regulators in the first quarter of 2008.The programme will help them to upgrade the skills of operators in the industry.
All licensed microfinance institutions will undergo a certification programme within the next three years. This is to ensure that the programme is self sustained and driven by credibility and professionalism on the part of the institutions selected to drive it. The supervisory board of the programme would be headed by the CBN.The certification programme will aimed at establishing high standard for the certificate, benchmarked on international best practices and training curricula.The CBN would adopt zero tolerance in ensuring that the issue of insider abuse, which was common with the community banks, does not arise.For instance, as apart of its measures, ownership structure would be diversified,Management must be suitably qualified, experienced, competent, committed and certified microfinance practitioners. MFB should operate in line with commercial principles, best MF practices and high accounting, auditing and MIS standards.
The apex bank had in December 2005, announced a new Microfinance framework.Under the regulatory guidelines, Unit Microfinance Banks are expected to have a minimum of N20 million capital base, while the State Microfinance Banks are required to beef up their capital base to the tune of N1 billion. Licences of those that are unable to scale through the recapitalisation exercise are to be revoked.
As at end of last month, about 407 have already been given licence to open and commence business along side four non-governmental organizations (NGOs) and its expected that by the December 31, 2007 deadline, the remaining 250 community banks that are unsuccessful would have their licences revoked by an exit strategy that is being worked by the CBN and NDIC in order to create a soft-landing for the institutions and instil confidence in depositors.disclosed already about 150 community banks out of the 250 that are unlikely to meet the deadline have closed down even before the commencement of the consolidation exercise in the sub-sector.He however assured of CBN’s commitment in ensuring that depositor’s funds in the remaining institutions are protected. “The CBN and NDIC are working out an exit strategy for these institutions in a way that we will not hamper depositors confidence.The CBN intend to run a certification programme for operators and regulators in the first quarter of 2008.The programme will help them to upgrade the skills of operators in the industry.
All licensed microfinance institutions will undergo a certification programme within the next three years. This is to ensure that the programme is self sustained and driven by credibility and professionalism on the part of the institutions selected to drive it. The supervisory board of the programme would be headed by the CBN.The certification programme will aimed at establishing high standard for the certificate, benchmarked on international best practices and training curricula.The CBN would adopt zero tolerance in ensuring that the issue of insider abuse, which was common with the community banks, does not arise.For instance, as apart of its measures, ownership structure would be diversified,Management must be suitably qualified, experienced, competent, committed and certified microfinance practitioners. MFB should operate in line with commercial principles, best MF practices and high accounting, auditing and MIS standards.
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