Joe Alegienu, the Central Bank of Nigeria’s Director of Development Banking, said at a recent meeting with managers of the National Poverty Alleviation Programme (NAPEP), that it is developing a framework to regulate microfinance institutions (MFIs) within Nigeria. NAPEP, established in 2001, is the primary agency of the Nigerian government responsible for coordinating and monitoring poverty eradication activities.
The decision to create a new framework has come about, according to Mr Alegienu, because regulation, as it stands, has not been able to prevent commercial bank operators from posing as MFIs. The new MFI framework is expected to be instituted by June.
“We do not want a situation where the microfinance banks that were established to support the fight against poverty among rural people are allowed to turn into a monster that would consume the people,” Mr Alegienu said. “We will soon publish an operational template that would serve as a guide on how microfinance banks are going to do business. It is time to tell those not qualified to do the business to stay away.”
By: Christine Chang, Research Associate
About 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 are 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.
Additional Resources:
NEXT: Central Bank to announce new template for microfinance banks, March 31, 2010: http://234next.com/csp/cms/sites/Next/News/5548039-147/central_bank_to_announce_new_template.csp
MicroCapital Universe: Central Bank of Nigeria: https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Central+Bank+of+Nigeria+%28CBN%29
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