The 224 microfinance banks (MFBs) whose licenses were recently revoked by the Central Bank of Nigeria (CBN), Nigeria’s central banking authority, must satisfy a new requirement of a minimum capital base of NGN 100 million (approximately USD 650,000) and NGN 2 billion (USD 13.1 million) respectively for unit and state MFBs if they wish to obtain new licenses to resume lending.
These requirements are 400 percent and 100 percent higher than the current NGN 20 million (approximately USD 132,000) and NGN 1 billion (approximately USD 6.6 million) capital requirement for existing MFBs operating in the country. The deadline for meeting this new requirement is December 31, 2011.
By Witt Gatchell, Research Associate
About the 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).
Sources and Additional Resources:
[1] Business Day Nigeria: “Shut Microfinance Banks Need New Licenses to Restart Operations” by John Omachonu, http://www.businessdayonline.com/index.php?option=com_content&view=artic…
MICROCAPITAL BRIEF: “Central Bank of Nigeria Revokes Licenses of 224 Microfinance Banks” https://www.microcapital.org/microcapital-brief-central-bank-of-nigeria-r…
MICROCAPITAL BRIEF: “Central Bank of Nigeria to Discontinue Issuance of Universal Banking Licenses, Introduce Three New Banking License Classes in 2011, Microfinance to Fall Under ‘Specialized’ Category” https://www.microcapital.org/microcapital-brief-central-bank-of-nigeria-t…
MicroCapital’s Microfinance Universe profile: Central Bank of Nigeria (CBN)
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Cen…
Browse the MicroCapital Universe and add your entry to the wiki at https://www.microcapital.org/microfinanceuniverse/
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