The Nigeria Deposit Insurance Corporation (NDIC), an agency of the federal government of Nigeria, has reportedly appointed debt recovery agents (DRAs) for microfinance banks (MFBs) in liquidation to recover “debts owed to the 103 closed MFBs nationwide.” The initiative has so far collected NGN 102.6 million (USD 650,000) from “the sale of physical assets and recovery of loans and advances owed” to closed banks. The total amount still owed has not been released. Calls have also been made to set up an institution to purchase bad debt from the microfinance sector [1].
As of 2010, 24 microlenders in Nigeria report to the US-based nonprofit Microfinance Information Exchange aggregate loans of USD 84.4 million outstanding to 482,300 borrowers.
By Brendan Millan, Research Associate
About the Nigeria Deposit Insurance Corporation (NDIC): NDIC is a quasi-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.
Sources and Resources:
[1] Business Day: “MFBs Trade With Caution as Debtors Face Recovery Agents” by Hope Moses-Ashike. http://www.businessdayonline.com/NG/index.php/microfinance/33737-mfbs-trade-with-caution-as-debtors-face-recovery-agents
MicroCapital.org Article, December 20, 2011, “Nigeria Deposit Insurance Corporation (NDIC) to Promote Microfinance Bank Mergers in Bid to Minimize Liquidations”, https://www.microcapital.org/microcapital-brief-nigeria-deposit-insurance-corporation-ndic-to-promote-microfinance-bank-mergers-in-bid-to-minimize-liquidations/
MicroCapital.org Article, October 4, 2011, “MICROCAPITAL BRIEF: Central Bank of Nigeria Approves New Capital Base Requirements for Microfinance Banks (MFBs), MFBs Await Capital Verification Results”, https://www.microcapital.org/microcapital-brief-central-bank-of-nigeria-approves-new-capital-base-requirements-for-microfinance-banks-mfbs-mfbs-await-capital-verification-results/
MicroCapital.org Article, October 1, 2010, “Central Bank of Nigeria Revokes Licenses of 224 Microfinance Banks”, https://www.microcapital.org/microcapital-brief-central-bank-of-nigeria-revokes-licenses-of-224-microfinance-banks/
MicroCapital.org Article, May 5, 2011, “Central Bank of Nigeria Inspecting Microfinance Institutions with Provisional Licenses, Plans to Cut Number of Microbanks ‘Drastically’”, https://www.microcapital.org/microcapital-brief-central-bank-of-nigeria-inspecting-microfinance-institutions-with-provisional-licenses-plans-to-cut-number-of-microbanks-“drastically”/
MicroCapital Universe: Nigeria Deposit Insurance Corporation (NDIC), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Nigeria+Deposit+Insurance+Corporation+%28NDIC%29
Browse the MicroCapital Universe and add your entry to the wiki at: https://www.microcapital.org/microfinanceuniverse/
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