According to a recent article in Nigeria’s Business Day newspaper, some microfinance institutions (MFIs) are experiencing liquidity squeezes as their customers withdraw cash for the Christmas holiday. One MFI operator, who did wish to be identified, was quoted as saying, “Customers are withdrawing their money, and the [commercial] banks closed their door against us. It is a big challenge. We do not know what to do.” Although several other MFI directors expressed little concern, liquidity problems have been widespread in Nigeria for much of the year. The Central Bank of Nigeria (CBN) has stepped in to address the carnage caused (partially) by steep drops in both foreign investment and lending from commercial banks to MFIs since the start of the global economic slowdown. Olive Microfinance Bank CEO Eniola Agbesoyin reportedly attributed the increased withdrawals to a lack of customers’ confidence in the banking system. Mr Eniola said that MFIs are working to reassure their customers that the current “sanitization” being done by the Central Bank of Nigeria (CBN) is actually a reason to be more confident in the sector.
Sources and resources
Business Day article:
http://www.businessdayonline.com/index.php?option=com_content&view=article&id=6665:mfb-crisis-in-the-face-of-increased-yuletide-withdrawals-&catid=117:news&Itemid=349
Central Bank of Nigeria:
http://www.cenbank.org/
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