MICROCAPITAL BRIEF: Nigeria Federal Government Supports Central Bank of Nigeria (CBN) to Establish Microfinance Development Fund

Nigeria’s President Goodluck Jonathan recently announced at the country’s fifth Annual Microfinance Conference and Entrepreneurial Award Ceremony that the federal government would support the Central Bank of Nigeria’s (CBN’s) plan to establish a Microfinance Development Fund dedicated towards developing the country’s microfinance sector. The President asserted that the fund would help Nigeria grow economically by increasing investment, creating job opportunities and decreasing the poverty rate. The target size of the fund has not been disclosed.

President Jonathan also encouraged microfinance institutions (MFIs) to educate staff and clients and urged MFIs and CBN to create policies that would enable small businesses and individuals to access financial services at low interest rates. Mallam Sanusi, governor of CBN, also reasoned that some of the challenges to financial inclusion included social exclusion, illiteracy, distance from bank branches and high transaction costs. CBN reportedly plans to review and revise the country’s current microfinance policy, which was implemented in 2005. It plans to implement the reviewed policy this year.

By Julie Moksim, Research Associate

About Central Bank of Nigeria (CBN): Central Bank of Nigeria (CBN), established in 1958, is Nigeria’s central banking authority. As defined by the 1958 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 July 2010, CBN reports total assets of NGN 7.37 trillion (the equivalent of USD 48.6 billion).

Source:

AllAfrica.com: “FG Supports Creation of Microfinance Development Fund” by James Emejo, January 24, 2011, http://allafrica.com/stories/201101240467.html

MicroCapital.org Brief, January 3, 2011: Government of Nigerian State of Ondo and Bank of Industry (BOI) Disburse $13m to Microfinance Scheme, https://www.microcapital.org/microcapital-brief-government-of-nigerian-state-of-ondo-and-bank-of-industry-boi-disburse-13m-to-microfinance-scheme/

MicroCapital.org Brief, October 29, 2010: Central Bank of Nigeria (CBN) Gives Provisional Approval for 121 New Microfinance Bank (MFB) Licenses, https://www.microcapital.org/microcapital-brief-central-bank-of-nigeria-cbn-gives-provisional-approval-for-121-new-microfinance-bank-mfb-licenses/

MicroCapital’s Microfinance Universe profile: Central Bank of Nigeria

https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Central+Bank+of+Nigeria+%28CBN%29

Browse the MicroCapital Universe and add your entry to the wiki at:

https://www.microcapital.org/microfinanceuniverse/