The Central Bank of Nigeria (CBN), Nigeria’s central bank, reportedly is moving to establish a special court to hear cases on loan defaults by customers of microfinance banks. According to a statement attributed to Olufemi Fabanwo, the Director of Other Financial Institutions Department of CBN, the establishment of this court is “vital to the survival of the subsector.” CBN has been working with the Department of Justice to establish these courts.
Mr. Fabanwo’s announcement comes a year after his unveiling of his plan for such a court system. Mr. Fabanwo noted that the delay had negatively affected some microfinance banks’ activities. “Some loans that would have been recovered, if the special court had been established, are already going bad,” Fabanwo noted. “The subsector needs the special court as quickly as possible.”
By John Crawford, Research Associate
About Central Bank of Nigeria (CBN)
The Central Bank of Nigeria (CBN) was established in 1958 as Nigeria’s central banking authority. As defined by the 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 November 2011, CBN reports total assets of NGN 9.77 trillion (USD 61.9 billion).
Sources and Additional Resources
[1] http://www.businessdayonline.com/NG/index.php/microfinance/37946-cbn-to-…
[2] http://www.businessdayonline.com/NG/index.php/microfinance/37267-mfb-cbn…
MicroCapital.org story, May 28, 2012, “MICROCAPITAL BRIEF: Central Bank of Nigeria (CBN_ Financial Inclusion Strategy Includes Goal of 63m Savings Accounts by 2020,” https://www.microcapital.org/microcapital-brief-central-bank-of-nigeria-c…
MicroCapital.org story, May 18, 2012, “MicroCapital Brief: Central Bank of Nigeria (CBN): MSME Development Fund Not for Bailing out Microfinance Banks”, https://www.microcapital.org/microcapital-brief-central-bank-of-nigeria-c…
MicroCapital Univerise Profile for Central Bank of Nigeria (CBN): 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/
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