by Trevor Kwong - Africa -

MICROCAPITAL BRIEF: “This Day” Online Editorial Laments Closure of 224 Insolvent Nigerian Microfinance Institutions (MFIs)

The editors of This Day Online lament the revocation of 224 Nigerian microfinance institutions’ (MFIs’) operating licenses in a recent posting.

Citing the Central Bank of Nigeria (CBN), the editorial claims that the MFIs involved, which amount to 27 percent of the total number of Nigerian MFIs, were all insolvent: “A total of NGN 18.2 billion [approximately USD 118 million] depositors’ funds and NGN 6.1 billion [approximately USD 39.5 million] shareholders’ funds are believed to be trapped in the affected banks”. The editorial stresses that MFIs can be profitable and suggests doubt that the CBN provided adequate prudential supervision to MFIs.

Nigerian MFIs that reported data for the year 2009 to the Microfinance Information Exchange (MIX), the microfinance information clearinghouse, held an aggregate loan portfolio of USD 64 million and total assets of USD 85.2 million and served 439,902 active borrowers.

By Trevor Kwong, Research Assistant

Sources and Additional Resources:
[1] Source Article: This Day Online: Nigeria: The Microfinance Disappointment
http://www.thisdayonline.com/news.php?theme=10

[2] Microfinance Information Exchange: Nigeria:
http://www.mixmarket.org/mfi/country/Nigeria

[3] MicroCapital Brief: MICROCAPITAL BRIEF: 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/

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