MICROCAPITAL STORY: Central Bank of Nigeria Grants 815 New Microfinance Licenses

The Central Bank of Nigeria (CBN) granted licenses to 815 microfinance institutions (MFIs) at a ceremony officially launching of the results of an EFINA survey on the adult banking population. The organizations to which licenses were granted were not listed, however a complete list of MFIs operating in Nigeria can be found on the CBN website. Representatives from CBN addressed the need for additional MFIs operating throughout Nigeria, acknowledging that there is a fragmentation of the concentration of MFIs throughout the different states of Nigeria. It was stressed, however, that although the CBN will endeavour to increase the licenses granted to MFIs, the CBN will not hesitate to withdraw licenses from MFIs who fail to adhere to the regulations.

The ceremony launching the results of the survey by Enhancing Financial Innovation and Access (EFINA) prompted statements regarding the challenges for successful developmental growth in Nigeria, with specific reference to microfinance, by both CBN and EFINA representatives. CBN will collaborate with EFINA so that the results of research conducted by EFINA will be used to inform CBN microfinance initiatives and provide a platform for improving on the bank’s microfinance data gathering capabilities. The information gathered by EFINA will be used “as a basis for putting in place strategies for enhancing access to finance and the growth of the microfinance sub-sector”.

Enhancing Financial Innovation and Access (EFINA) is a non-governmental organization (NGO) whose role is to provide financial institutions and regulators with information that can be used to develop products and services that will cater to the needs of the poor in Nigeria. It was set up in late 2007 through funding by the UK’s Department for International Development (DFID) and the Ford Foundation. MicroCapital recently covered the announcement of funding for EFINA. The story also covers a brief summary of the survey results.

The Central Bank of Nigeria (CBN) was established in 1958. In September, 2008 it reported assets of N8.4 trillion (USD 71 million). Further stories on the CBN and microfinance can be found in these MicroCapital stories.

By Lori Curtis, Research Assistant

Additional Reading:

Central Bank of Nigeria: “Home” “Statement of Assets“

Financial Standard: “CBN to partner Efina on microfinance banking“

MicroCapital Story: “DFID Expands Microfinance Partnerships in Nigeria with US $13.9 million in Funding“

MicroCapital Story: “Central Bank of Nigeria Laments Poor Participation in Microfinance Industry in Northern Nigeria“

Vanguard: “815 Micro finance banks get licences“