MICROCAPITAL BRIEF: Nigerian Deposit Insurance Corporation (NDIC) Launches Investigation into Managers, Directors of Distressed Microfinance Banks

The Nigerian Deposit Insurance Corporation (NDIC), an agency of the federal government of Nigeria, reportedly has launched an investigation into the NGN 7 billion (USD 44.4 million) owed to the 103 bankrupt microfinance banks (MFBs) by their managers and directors. NDIC officials have stated that those suspected of fraudulent practices will be prosecuted. NDIC has paid NGN 3 billion (USD 19 million) to insured depositors of distressed MFBs to date. NDIC has announced plans to conduct on-site inspections of 250 MFBs, including the distressed banks [1].

For the year 2010, 24 microfinance institutions (MFIs) in Nigeria report to the US-based nonprofit Microfinance Information Exchange (MIX) aggregate gross loan portfolio of USD 84.4 million outstanding to approximately 482,000 borrowers.

By Brendan Millan, Research Associate

About the Nigeria Deposit Insurance Corporation (NDIC): NDIC is a quasi-independent agency of the federal government of Nigeria. Its purpose is to protect depositors and guarantee the settlement of insured funds when a deposit-taking financial institution can no longer repay its deposits.

Sources and Resources:

[1] Vanguard: “Distressed MFBs: NDIC to Prosecute directors over N7bn Loans” by Nkiruka Nnorom. http://www.vanguardngr.com/2012/04/distressed-mfbs-ndic-to-prosecute-directors-over-n7bn-loans/

MicroCapital.org Article, April 3, 2012, “Nigerian Deposit Insurance Corporation (NDIC) Disburses $12.6m to Depositors of Closed Nigerian Microfinance Banks”, https://www.microcapital.org/microcapital-brief-nigerian-deposit-insurance-corporation-ndic-disburses-12-6m-to-depositors-of-closed-nigerian-microfinance-banks/

MicroCapital.org Article, March 1, 2012, “Nigeria Deposit Insurance Corporation (NDIC) Appoints Debt Recovery Agents to Seek Repayments Owed Microfinance Institutions in Liquidation”, https://www.microcapital.org/microcapital-brief-nigeria-deposit-insurance-corporation-ndic-appoints-debt-recovery-agents-to-seek-repayments-owed-microfinance-institutions-in-liquidation/

MicroCapital.org Article, December 20, 2011, “Nigeria Deposit Insurance Corporation (NDIC) to Promote Microfinance Bank Mergers in Bid to Minimize Liquidations”, https://www.microcapital.org/microcapital-brief-nigeria-deposit-insurance-corporation-ndic-to-promote-microfinance-bank-mergers-in-bid-to-minimize-liquidations/

MicroCapital.org Article, October 4, 2011, “Central Bank of Nigeria Approves New Capital Base Requirements for Microfinance Banks (MFBs), MFBs Await Capital Verification Results”, https://www.microcapital.org/microcapital-brief-central-bank-of-nigeria-approves-new-capital-base-requirements-for-microfinance-banks-mfbs-mfbs-await-capital-verification-results/

MicroCapital.org Article, May 5, 2011, “Central Bank of Nigeria Inspecting Microfinance Institutions with Provisional Licenses, Plans to Cut Number of Microbanks ‘Drastically’”, https://www.microcapital.org/microcapital-brief-central-bank-of-nigeria-inspecting-microfinance-institutions-with-provisional-licenses-plans-to-cut-number-of-microbanks-“drastically”/

MicroCapital.org Article, April 23, 2011, “Central Bank of Nigeria (CBN) Governor Explains Delay in Microfinance Regulatory Framework”, https://www.microcapital.org/microcapital-brief-central-bank-of-nigeria-cbn-governor-explains-delay-in-microfinance-regulatory-framework/

MicroCapital.org Article, March 21, 2011, “Central Bank of Nigeria (CBN): No More Time for Microfinance Banks (MFBs) to Recapitalize”, https://www.microcapital.org/microcapital-brief-central-bank-of-nigeria-cbn-no-more-time-for-microfinance-banks-mfbs-to-recapitalize/

MicroCapital.org Article, October 1, 2010, “Central Bank of Nigeria Revokes Licenses of 224 Microfinance Banks”, https://www.microcapital.org/microcapital-brief-central-bank-of-nigeria-revokes-licenses-of-224-microfinance-banks/

MicroCapital.org Article, September 20, 2010, “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-to-discontinue-issuance-of-universal-banking-licenses-introduce-three-new-banking-license-classes-in-2011-microfinance-to-fall-under-specialized-categ/

MicroCapital Universe: Nigerian Deposit Insurance Corporation (NDIC), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Nigeria+Deposit+Insurance+Corporation+%28NDIC%29

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