The Central Bank of Nigeria (CBN), the country’s central bank, and the National Association of Microfinance Banks (NAMB), a trade group of 820 microfinance banks (MFBs) in Nigeria, recently agreed to establish a technical committee to address the recapitalization and other steps that some MFBs must undertake to comply with the Revised Microfinance Policy Framework that took effect January 1. NAMB had previously issued a statement challenging the timing of the revised policy, which restricted the number of branches MFBs could operate based on three tiers of minimum capital requirements as was covered by MicroCapital on February 5, 2013.
Jethro Akun, the president of NAMB, reportedly said, “The committee is made up of CBN and NAMB to look at grey areas of policy for the smooth operation of the micro finance sub-sector and the benefit of the entire society.” The committee will also address “any other thing seen as an impediment” to the growth of the nation’s microfinance industry.
Reportedly, CBN has not yet followed through on its threats to revoke the licenses of MFBs that are out of compliance although many MFBs have yet to comply with the revisions.
By Nicole Boyd, Research Associate
About Central Bank of Nigeria (CBN)
The Central Bank of Nigeria (CBN) was established in 1958 as Nigeria’s central banking authority. As defined by the act of parliament that created CBN, its statutory mandates are as follows: “to issue legal tender currency; to maintain external reserves; to safeguard the international value of the legal tender currency; to promote monetary stability and a sound financial system in Nigeria; and to act as banker and financial adviser to the Federal Government.” As of November 2012, CBN reports total assets of NGN 13.3 trillion (USD 82.4 billion).
About National Association of Microfinance Banks (NAMB)
The National Association of Microfinance Banks (NAMB) is a trade group of Nigerian microfinance banks (MFBs) that merged with the Association of Microfinance Banks in Nigeria (AMBN) in 2009. As of April 2011, NAMB has 820 member MFBs. Its Lagos State Chapter has 180 members as of December 2011.
Sources and Additional Resources:
Vanguard (Nigeria). “CBN, NAMB agree on review of micro finance banks’ recapitalization,” http://www.vanguardngr.com/2013/02/cbn-namb-agree-on-review-of-micro-finance-banks-recapitalisation/
CBN. Revised Microfinance Policy Framework. http://www.cenbank.org/out/2011/pressrelease/gvd/revised%20microfinance%20policy%20july%2012%202011.pdf
CBN. December 17, 2012, Circular OFI/DIR/CIR/GEN/01/09 http://www.cenbank.org/out/2012/ccd/circular%20on%20compliance%20with%20the%20revised%20microfinance%20policy%20framework%20reminder.pdf
MicroCapital. February 5, 2013, “MICROCAPITAL BRIEF: Smaller Microfinance Banks in Nigeria Want 2 More Years to Raise Capital or Close Branches,” https://www.microcapital.org/microcapital-brief-smaller-microfinance-banks-in-nigeria-want-2-more-years-to-raise-capital-or-close-branches/
MicroCapital. April 2, 2010, “MICROCAPITAL BRIEF: Central Bank of Nigeria (CBN) Developing a Framework to Regulate Microfinance Banking in the Country and Keep ‘Monsters’ Out of the Industry,” https://www.microcapital.org/microcapital-brief-central-bank-of-nigeria-cbn-developing-a-framework-to-regulate-microfinance-banking-in-the-country-and-keep-?monsters?-out-of-the-industry
MicroCapital Universe Profile: National Association of Microfinance Banks (NAMB) https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=National+Association+of+Microfinance+Banks+of+Nigeria+%28NAMB%29
MicroCapital Universe Profile: Central Bank of Nigeria (CBN) https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Central+Bank+of+Nigeria+%28CBN%29
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