Banks in Nigeria reportedly have been rejecting third-party cheques from microfinance banks (MFBs). The cheques, which are issued in the names of MFBs’ individual and corporate customers, are reportedly being refused during clearance due to concerns that they might have been cloned or stolen by fraudulent parties.
Mr Olufemi Babajide, chairman of the Lagos State Chapter of the Nigerian trade group National Association of Microfinance Banks (NAMBs), reportedly said that Zenith Bank, Access Bank, Stanbic IBTC and Intercontinental Bank have been rejecting the cheques. However, Mr Babajide added that Sterling Bank and Unity Bank have agreed to assist the MFBs in clearing them. He was quoted as having said, “The commercial banks have not given us any reason for rejecting the third-party cheques. As a matter of fact, we have reported the issue to the Central Bank of Nigeria (CBN) for necessary actions. We are still waiting for CBN to do something on the issue.”
Mr Lukman Oyebanji, Managing Director of Nigerian financial institution Sapida Microfinance Bank Limited, was quoted as having said, “I think commercial banks are looking for all possible means of averting troubles relating to the clearing of third [party] cheques from the microfinance banks. Now the banks want all the cheques that will be sent to them for clearing to be written in the name of the concerned MFBs.… We were mandated to fill [out an] indemnity form so as to indemnify the MFB’s customer, so that whenever there is a problem with third-party cheques, such MFB will bear the consequence.” Commercial banks that are clearing the cheques are reportedly requiring MFBs to keep substantial deposits with them as a guarantee in order for their third-party cheques to be cleared.
By Kristha Abores, 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 July 2011, CBN reports total assets of NGN 8.37 trillion (the equivalent of USD 54 billion).
About National Association of Microfinance Banks of Nigeria (NAMB):
The National Association of Microfinance Banks of Nigeria (NAMB) is a trade group of microfinance banks (MFBs) that merged with the Association of Microfinance Banks in Nigeria (AMBN) in 2009. As of April 2011, NAMB has 820 member MFIs. Its Lagos State Chapter has 180 members as of December 2011.
About Sapida Microfinance Bank:
Sapida Microfinance Bank, formerly known as the Ijebu-Imusin Community Bank Nigeria Limited, is a microfinance institution based in the Nigerian state of Ogun. Established in 1991, it began its operations as a community bank in 1992 and converted into a microfinance bank in 2007. It offers a range of savings and loans products to microfinance customers. Sapida does not report to US-based nonprofit Microfinance Information Exchange (MIX) and financial information on the organization is not otherwise available.
Sources and Additional Resources:
[1] “Banks reject MFBs cheques,” http://www.thenationonlineng.net/2011/index.php/business/money/36103-ban…
MicroCapital.org article, November 12, 2007, “NEWS WIRE: Nigeria: Microfinance Banks Seek Central Bank’s Intervention On Cheque Clearing,”https://www.microcapital.org/news-wire-nigeria-microfinance-banks-seek-ce…
MicroCapital.org article, February 6, 2012, “MICROCAPITAL BRIEF: Microfinance Banks Exempt from Nigeria’s Cash-Lite Cashless Banking System and Tax,” https://www.microcapital.org/microcapital-brief-microfinance-banks-exempt…
MicroCapital.org article, February 10, 2012, “MICROCAPITAL BRIEF: Plans Still on for Nigeria to Create Microfinance Development Fund in 2012,”https://www.microcapital.org/microcapital-brief-plans-still-on-for-nigeri…
MicroCapital Universe Profile: Central Bank of Nigeria (CBN), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Cen…
MicroCapital Universe Profile: National Association of Microfinance Banks of Nigeria (NAMB), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Nat…
MicroCapital Universe Profile: Sapida Microfinance Bank, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Sapida+Microfinance+Bank
Browse the MicroCapital Universe and add your entry to the wiki at: https://www.microcapital.org/microfinanceuniverse/
Similar Posts:
- MICROCAPITAL BRIEF: Ebanx Acquires Payment Initiator License, Accessing Pix to Simplify E-commerce Purchases in Brazil
- MICROCAPITAL BRIEF: QR Codes to Facilitate Retail Payments Across Cambodia-Laos Border
- MICROCAPITAL BRIEF: Buying Maritime Microfinance, Fintech Lender Payhippo Gains Deposit License, Access to Nigeria Inter-Bank Settlement System
- MICROFINANCE EVENT: AEMFI 25th Anniversary; November 28 – December 1, 2023; Addis Ababa, Ethiopia
- MICROCAPITAL BRIEF: Vanuatu Launches Vanklia System to Automate Large, Small Payments
