Mr. Olufemi Fabanwo, Nigeria’s (CBN) Director of the Other Financial Institutions Department, told news agencies that the central bank will investigate five recently failed microfinance banks and, if any operators are found to be fraudulent, he or she will be handed over to the EFCC, the country’s law enforcement agency. Operators are considered fraudulent if they have no state license to engage in banking activities. The five banks are: Integrated Microfinance Bank, KFC Microfinance Bank, Bristol Microfinance Bank, Unique Microfinance Bank, and Milestone Microfinance Bank, all based in Lagos.
“We have already given out circulars to microfinance banks to display their licenses in their banking premises, so that members of the public, who might want to do business with them would be able to discern and see,” said Mr. Fabamwo. He added that the CBN and Nigerian Deposit Insurance Corporation (NDIC) have jointly conducted license examinations on 150 microfinance banks to date. The News Agency of Nigeria (NAN) has recently reported that 930 microfinance banks presently operate in the country.
For more information on current issues faced by the Nigerian microfinance industry, see MicroCapital articles below in the bibliography.
By Jay Kumar, Research Assistant
Additional Resources:
1. Source Article: http://www.triumphnewspapers.com/cbn712010.html
2. MICROCAPITAL BRIEF: Nigeria Deposit Insurance Corporation (NDIC) Blames Microfinance Institutions (MFIs) for Lending Failures, MFIs Fault “Bad” Nigerian Borrowers: https://www.microcapital.org/microcapital-brief-nigeria-deposit-insurance…
3. MICROCAPITAL.ORG STORY: Nigerian MFI, Integrated Micro Finance Bank Plc (IMFB), Temporarily Closes Doors Due to Lack of Liquidity: https://www.microcapital.org/microcapitalorg-story-nigerian-mfi-integrate…
4. Integrated Microfinance Bank: http://www.imfb-bank.com/index.html
5. Bristol Microfinance Bank: http://www.bristolmfb.com
6. Central Bank of Nigeria: https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Central+Bank+of+Nigeria+(CBN)
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