MICROCAPITAL BRIEF: Nigeria Deposit Insurance Corporation (NDIC) Commences Nationwide Investigation of Microfinance Institutions (MFIs)

After a joint examination exercise with the Central Bank of Nigeria (CBN) and a slew of complaints from depositors of microfinance institutions (MFIs) that have shut down, the Nigeria Deposit Insurance Corporation (NDIC), the country’s financial industry regulator, recently began a nationwide investigation of MFIs.

A statement issued by the Head of the Public Affairs Unit of NDIC stated that the investigation became “necessary following the outcome of the recent routine examination of some of the licensed MFBs by the NDIC and CBN, which revealed that some of the [MFIs] had begun to harbor serious corporate governance weaknesses and infractions. These include granting of insider loans and advances without adherence to regulatory standards, outright frauds and forgeries as well as poor risk management practices.”

By Stefanie Rubin, Research Associate

About the Central Bank of Nigeria (CBN):

Central Bank of Nigeria (CBN) is Nigeria’s central banking authority, established in 1958. Some of the regulatory objectives of CBN as follows: to issue legal tender, to maintain the external reserves of the country, to promote monetary stability and a sound financial environment, and to act as a banker of last resort and financial adviser to the federal government.

About the Nigeria Deposit Insurance Corporation (NDIC):

The Nigeria Deposit Insurance Corporation (NDIC) was created in 1983 by the Board of the Central Bank of Nigeria in order to help regulate and supervise the country’s financial institutions.

Additional Resources:

Source Article: AllAfrica: NDIC Investigates Status of Microfinance Banks March 25, 2010

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MicroCapital Universe profile: Nigeria Deposit Insurance Corporation (NDIC)

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