The Nigeria Deposit Insurance Corporation (NDIC), an agency of the federal government that guarantees the settlement of insured deposits, recently announced that it will pay approximately NGN 9.8 billion (USD 63 million) to 731,000 depositors of ninety-one microfinance institutions (MFIs) whose licenses have been revoked. NGN 4.9 billion (USD 31.5 million) will reimburse insured deposits. The other NGN 4.9 billion will reimburse uninsured deposits with funds received from the sale of the physical assets of the MFIs and with any recovered debts owed to the MFIs.
A total of 103 MFIs in Nigeria that had their licenses revoked in late 2010 have not had them reinstated. Twelve of those have still not made their deposit records available to NDIC, a prerequisite for reimbursing their depositors. Preliminary investigations of the financial records of the 103 MFIs indicate that many of their directors and officers misappropriated funds for personal gain.
By Julie Moksim, Research Associate
About the Nigeria Deposit Insurance Company (NDIC): The Nigeria Deposit Insurance Corporation (NDIC) is an independent agency of the federal government of Nigeria. Its purpose is to protect depositors and guarantee the settlement of insured funds when a deposit-taking financial institution can no longer repay its deposits, thereby helping to maintain the stability of the financial system.
Sources and Additional Resources:
Daily Independent: “NDIC to Pay N9.8b to Depositors of Closed MFBS”, by Christopher Adedeji, April 20, 2011, http://www.independentngonline.com/DailyIndependent/Article.aspx?id=32471
MicroCapital.org Brief, March 7, 2011: Nigerian Microfinance Bank Classic Microfinance Ordered to Sell Assets to Pay Debts to Former Depositors, https://www.microcapital.org/microcapital-brief-nigerian-microfinance-bank-classic-microfinance-ordered-to-sell-assets-to-pay-debts-to-former-depositors/
MicroCapital.org Brief, February 17, 2011: Nigeria Deposit Insurance Corporation (NDIC) Meets with Directors of Liquidated Microfinance Institutions (MFIs) to Discuss Customer Payouts, https://www.microcapital.org/microcapital-brief-nigeria-deposit-insurance-corporation-ndic-meets-with-directors-of-liquidated-microfinance-institutions-mfis-to-discuss-customer-payouts/
MicroCapital.org Brief, October 19, 2010: Microfinance Banks (MFBs) Whose Licenses Were Recently Revoked by the Central Bank of Nigeria (CBN) May Reapply Under Stiffer Requirements, https://www.microcapital.org/microcapital-brief-microfinance-banks-mfbs-whose-licenses-were-recently-revoked-by-the-central-bank-of-nigeria-cbn-may-reapply-under-stiffer-requirements/
MicroCapital’s Microfinance Universe Profile: Nigeria Deposit Insurance Company (NDIC)
Browse the MicroCapital Universe and add your entry to the wiki at https://www.microcapital.org/microfinanceuniverse/
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