In a recent op-ed piece published in Nigeria’s online Daily Trust, Ms Ijeoma Kalu urges the Central Bank of Nigeria (CBN) to tighten regulation of the microfinance industry and ensure “that only professionals are permitted to practice.”
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MICROCAPITAL BRIEF: Central Bank of Nigeria (CBN) Developing a Framework to Regulate Microfinance Banking in the Country and Keep “Monsters” Out of the Industry
Joe Alegienu, the Central Bank of Nigeria’s Director of Development Banking, said at a recent meeting with managers of the National Poverty Alleviation Programme (NAPEP), that it is developing a framework to regulate microfinance institutions (MFIs) within Nigeria.
MICROCAPITAL BRIEF: Central Bank of Nigeria (CBN) to Handover Debtors of Distressed Microfinance Banks to Economic and Financial Crimes Commission (EFCC) and Revoke Operating Licenses of Microfinance Banks That Have Closed Operations for More Than Six Months
An investigation by Vanguard, a newspaper in Nigeria, indicates that the Central Bank of Nigeria (CBN) is currently compiling names of individuals who have received loans from microfinance banks and have failed to repay those funds.
MICROCAPITAL BRIEF: Central Bank of Nigeria (CBN) Creates Mandatory Exam for Microfinance Bank Managers
MICROCAPITAL BRIEF: Governor Uduaghan of Delta State Receives Central Bank of Nigeria’s Microfinance Award
The Central Bank of Nigeria (CBN) has given Governor Emmanuel Uduaghan of Delta State the country’s microfinance award. Governor Uduaghan received the award because his state’s microfinance initiative has seen the most promising results.
MICROCAPITAL BRIEF: The Central Bank of Nigeria (CBN) Investigates “Fraudulent Practices” at Five Recently Failed Nigerian Microfinance Banks
Mr. Olufemi Fabanwo, Nigeria’s (CBN) Director of the Other Financial Institutions Department, told news agencies that the central bank will investigate five recently failed microfinance banks and, if any operators are found to be fraudulent, he or she will be handed over to the EFCC, the country’s law enforcement agency. Operators are considered fraudulent if they have no state license to engage in banking activities. The five banks are: Integrated Microfinance Bank, KFC Microfinance Bank, Bristol Microfinance Bank, Unique Microfinance Bank, and Milestone Microfinance Bank, all based in Lagos.
MICROCAPITAL BRIEF: Vanguard News Claims Central Bank of Nigeria (CBN) Will Revoke Operating Licenses of Several Microfinance Banks
According to a Vanguard News Online article, the Central Bank of Nigeria (CBN) has decided to revoke the operating licenses of a number of illiquid microfinance banks [1,2].
MICROCAPITAL BRIEF: Central Bank of Nigeria (CBN) Encourages Microfinance Banks (MFBs) To Cut Costs
At a meeting between microfinance banks (MFBs) and the Central Bank of Nigeria (CBN) in Lagos recently, CBN Governor Lamido Sanusi urged MFBs to adopt cost cutting measures, including the reduction of staff. Also, Govenor Sanusi stated that “MFBs should not mismatch assets and liabilities. Typically, MFBs get deposits of 30 days, however, they end up using [the 30 day deposit] to create loans of six months to one year.” These suggestions are in response to the recent liquidity problem among the 1,000 MFBs in Nigeria. In support of these measures, Director Femi Fabamwo of Other Financial Institutions Department (OFID), which is a division of CBN, stated, “The aim is to reduce the rate at which some of these banks fold up because it seems like most of them are competing with commercial banks… If [MFBs] can maintain low cost [structures], they [will] be able to improve their operations.”
MICROCAPITAL BRIEF: Central Bank Of Nigeria (CBN) Issues Guidelines On Operation Of The Microcredit Fund
The Central Bank of Nigeria (CBN) recently presented guidelines to state governments on how they may access the monies held by its Microcredit Fund. Established in 2008, the Microcredit Fund, a national government fund which was originally funded with contributions from state governments, holds NGN 50 billion (USD 333.94 million) and is ready to be operationalized. The Microcredit Fund represents the national government’s effort to securely distribute state monies in order to develop the microfinance sector. The general scheme implements several layers of bureaucracy in order to ensure a secure channel by which microenterprises may ultimately access monies from the Microcredit Fund and perhaps is a reflection of the recent turmoil in the nation’s microfinance sector.[2] State governments must first set up a separate account with a commercial bank which is intended to hold the monies received from the Microcredit Fund. The account is then used by state governments in partnership with local banks to disburse loans to microenterprises that fit within the parameters of the Microcredit Fund’s objectives. Once disbursed, it is the responsibility of state governments to establish a mechanism to monitor and supervise the repayment of the loans and, out of the repaid proceeds, pay back to the Microcredit Fund a percentage of the returns. These guidelines are meant to responsibly develop the microfinance sector and ensure compliance by state governments and commercial banks with existing microfinance regulations.
MICROCAPITAL BRIEF: Microfinance Banks Want In On Central Bank Of Nigeria’s Proposed Bailout Of Commercial Banks
Commentators are arguing that the Central Bank of Nigeria’s (CBN’s) proposed bank bailout program extend to distressed microfinance banks. The Central Bank of Nigeria is considering the establishment of an asset management company that would buy certain distressed loans from commercial banks at a discount with the goal of providing greater liquidity in the banking sector. This program would not extend in its current iteration to microfinance banks because only loans with identifiable collateral are eligible. Mr. Akin Oladeji, Managing Director of a local investment bank, opposes the call to bailout distressed microfinance banks because they operate in the informal sector and therefore are not fully integrated into Nigeria’s financial markets. Rather, he states that a separate government agency should be created to supervise and provide assistance to ailing microfinance banks.
MICROCAPITAL.ORG STORY: Central Bank of Nigeria (CBN) Considering Outsourcing the Supervision of Microfinance Banks (MFBs)
Central Bank of Nigeria (CBN) governor, Mallam Lamido Sanusi, said recently, while speaking in a meeting at corporate headquarters, that the supervision of the 800+ microfinance banks (MFBs) in Nigeria may be outsourced.
MICROCAPITAL STORY: Royal Exchange PLC Gets Approval from Central Bank of Nigeria for Microfinance Bank
Royal Exchange Plc, a Nigerian insurance company, has received approval from the Central Bank of Nigeria (CBN) to operate a microfinance bank according to a report on Nigeria’s Business Day Online. Having satisfied all statutory requirements for opening a microfinance bank, Royal Exchange is currently making preparations to begin operations in the next few months. The new venture is in line with the company’s mission to evolve into one of the leading financial service firms in the world. According to Royal Exchange Group Managing Director Allan Walmsley, “That vision has seen us strategically restructure our operations while a comprehensive and integrated rebranding project also is currently underway.” Other components of this vision include technology upgrades, human capital development, risk management, product enhancement and diversification. Walmsley also stated that the company envisions “a number of strategic acquisitions to assure our future in the non-banking, financial services industry.”
MICROCAPITAL STORY: Central Bank of Nigeria (CBN) Celebrates New Microfinance Licenses and Challenges Governments at 3rd Annual Microfinance and Microfinance Entrepreneurship Awards
The Central Bank of Nigeria (CBN) announced at the 3rd Annual Microfinance and Microfinance Entrepreneurship Awards Ceremony that it has licensed a total of 840 microfinance institutions throughout the country in, 25 of which have been licensed since September 2008. CBN Governor Chukwuma Soludo stated that despite this increase in MFIs, as well as an increase in branches of universal banks by two thousand since 2003, access to formal finance in Nigeria remains at 35 percent. Local and state governments were challenged to establish and mainstream microfinance programmes while praising particular microfinance initiatives such as the Agricultural Credit Guarantee Scheme (ACGSF), the insurance deposits for microfinance by the Nigeria Deposit Insurance Corporation (NDIC) as well the development of a credit bureau, the Credit Reference Company.
MICROCAPITAL STORY: Central Bank of Nigeria (CBN) Declares that New Microfinance Bank Licenses Will Only Be Granted Only to Those Operating in Rural Areas
The Central Bank of Nigeria (CBN) has announced a new condition of receiving Microfinance Bank (MFB) licenses. Going forward, only microfinance institutions that are ready to operate in rural areas will be given licenses. This new condition follows the recent statements, reported on MicroCapital, by Charles Soludo, Governor of the CBN, that only 12 of 36 Nigerian states contribute to microfinance. On a combined basis, these 12 states have contributed USD 1.26 million to microfinance. The new condition is an attempt to create more balance in the availability of financial services across the rural and urban areas. Mr. Tunde Lemo, Deputy Governor, Financial Sector Surveillance, CBN, said that the central bank will give special, rapid consideration to any microfinance institutions seeking to begin operations in rural, underserved states.
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.
MICROCAPITAL STORY: Central Bank of Nigeria Laments Poor Participation in Microfinance Industry In Northern Nigeria
Originally reported by Nigerian news agency This Day, Mathius Kura, the Plateau State Branch Controller of Central Bank of Nigeria (CBN), a bank aligned with the Nigerian government to drive regulation and policy, noted the irony in how little participation there is in microfinance bank industries in the northern states of Nigeria. Kura was speaking at a one-day workshop – Micro-finance, Problems and Prospects – organized by the Chartered Institute of Bankers of Nigeria (CIBN). Kura observed that the Anambra state alone has over 100 microfinance banks; a value that surpasses that of the entire north put together, excluding Kwara State.
MICROCAPITAL STORY: Why the Central Bank of Nigeria’s Small and Medium Enterprises Equity Investment Scheme (SMEEIS) was Replaced by a Fund for Microfinance
This past spring, the Nigerian government cut its Small and Medium Enterprises Equity Investment Scheme (SMEEIS) due to a lack of success and underutilization. Recently, many comments by officials as well as outside criticisms have surfaced, explaining and defending the decision to cut SMEEIS and instead support the Nigerian Microcredit Development Fund.
MICROCAPITAL STORY: Central Bank of Nigeria (CBN) Approves Integrated Microfinance Bank Limited of Nigeria (IMFB) to Become a Nigerian “State Microfinance Bank”
The Central Bank of Nigeria, the Nigerian government’s central bank founded in 1958, recently gave Integrated Microfinance Bank Limited (IMFB), a Nigerian microfinance institution, approval to become a “state microfinance bank”, as affiliated with the Nigerian government. This will allow IMFB to establish new branches in any of the 36 states of Nigeria.