At a meeting between microfinance banks (MFBs) and the Central Bank of Nigeria (CBN) in Lagos recently, CBN Governor Lamido Sanusi urged MFBs to adopt cost cutting measures, including the reduction of staff. Also, Govenor Sanusi stated that “MFBs should not mismatch assets and liabilities. Typically, MFBs get deposits of 30 days, however, they end up using [the 30 day deposit] to create loans of six months to one year.” These suggestions are in response to the recent liquidity problem among the 1,000 MFBs in Nigeria. In support of these measures, Director Femi Fabamwo of Other Financial Institutions Department (OFID), which is a division of CBN, stated, “The aim is to reduce the rate at which some of these banks fold up because it seems like most of them are competing with commercial banks… If [MFBs] can maintain low cost [structures], they [will] be able to improve their operations.”
About Central Bank of Nigeria (CBN):
Established in 1958, the Central Bank of Nigeria (CBN) is Nigeria’s central banking authority. Some of the regulatory objectives of CBN follow: to issue legal tender, to maintain the external reserves of the country, to promote monetary stability and a sound financial environment, and to act as a banker of last resort and financial adviser to the federal government. CBN website: http://www.cenbank.org/AboutCBN/mission.asp
About Other Financial Institutions Department (OFID):
Established in 2001, the Other Financial Institutions Department (OFID) is part of the Central Bank of Nigeria’s Supervision framework. OFID supervises and regulates “other financial institutions,” including microfinance banks (MFBs), non-banking financial companies, exchange bureaus, primary mortgage institutions and development finance institutions. OFID website: http://www.cenbank.org/AboutCBN/Dir-FSS.asp#ofid
Bibliography:
CBN: https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Central+Bank+of+Nigeria+%28CBN%29
Additional Resources:
[1] Original article: http://www.vanguardngr.com/2009/12/20/more-bank-workers-heading-for-labour-market-as-cbn-orders-mfbs-to-cut-cost/
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