The Central Bank of Nigeria, the Nigerian government’s central bank founded in 1958, recently gave Integrated Microfinance Bank Limited (IMFB), a Nigerian microfinance institution, approval to become a “state microfinance bank”, as affiliated with the Nigerian government. This will allow IMFB to establish new branches in any of the 36 states of Nigeria.
Microfinance banks (MFBs) are usually required to obtain approval from the CBN before starting operations in another state. According to the Microfinance Policy, Regulatory and Supervisory Framework for Nigeria, written by the CBN, MFBs wishing to start operations in a new state must have satisfactorily covered two-thirds of the local government areas (LGAs) of the previous state they were operating in. In addition, MFBs must have approximately USD 172,332 in free funds to start a new branch in another state. According to the CBN, these regulations are in place to ensure full spread of the microfinance market across Nigeria and to avoid concentration of MFBs in areas where a large number of financial institutions already exist. MicroCapital recently reported on the Nigerian government’s concern about the higher distribution of MFBs in the south and the limited outreach of MFBs in the north.
The IMFB website states that it was founded and incorporated in 2006 by a “group of investors”, after being granted approval by the CBN. No further information is available about the identity of these investors. IMFB is the first microfinance bank (MFB) in Nigeria and started with an initial share capital of approximately USD 2.2 million, which has most recently increased to approximately USD 17.2 million. The bank’s primary goal is to provide unbanked individuals and small and medium enterprises (SMEs) with access to financial services. Currently, IMFB operates 8 branches and 37 business offices in three Nigerian states, and hopes to expand its operations to include 7 more branches by September.
According to the most recent financial data provided by the Microfinance Information Exchange (MIX), IMFB has total assets of USD 22.5 million with a gross loan portfolio of USD 7.0 million. At the end of 2007, IMFB had 8,641 active borrowers, and average loan balance per borrower was USD 816. Simon Akinteye, managing director and chief executive officer of IMFB, hopes that the bank’s customer base will grow by 5,000 individuals per week before the end of July this year.
Additional Resources:
AllAfrica.com: “Nigeria: CBM Grants IMFB State Status”
Central Bank of Nigeria (CBN): Home, About, Microfinance Policy, Regulatory and Supervisory Framework for Nigeria
Integrated Microfinance Bank Limited (IMFB): Home, About, Branches
MicroCapital.org Article, May 2008: Central Bank of Nigeria Warns of Mission Drifting by Microfinance Institutions
MIX Market: Profile for IMFB
U.S. Department of State: Nigeria
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