According to a statement attributed to Sanusi Lamido Sanusi, governor of the Central Bank of Nigeria (CBN), CBN plans to encourage the National Assembly to approve four bills that would tighten regulation of the financial sector. The four bills are: (1) the Electronic Transaction Bill, which would allow the admission of electronically generated statements as evidence in legal proceedings; (2) the Financial Ombudsman Bill, which aims to facilitate faster resolution of financial disputes; (3) the Nigerian International Financial Centre (NIFC) Bill, which would establish an NIFC to create a financial services district with its own administrative and judicial framework; and (4) the Alternative Dispute Resolution (ADR) Regulatory Commission Bill, which would create an ADR Commission to regulate the practice and use of ADR in the country. ADR techniques are intended to help parties settle disagreements without the need for lawsuits.
Mr Sanusi also reportedly said that CBN still plans to establish a Microfinance Development Fund (MFD) as was first announced by MicroCapital in January 2011. With an expected size of NGN 54 billion (USD 338 million), the fund would support the introduction of new products in the microfinance sector. He also claimed that the bank will continue to work towards reducing the use of cash in Nigeria, despite resistance from some citizens. According to Mr Sanusi, the use of cash increases operating costs in the financial sector, and the increased costs are transferred to clients via service charges and high lending rates. In support of this effort the government plans to implement a “Shared Services Initiative,” which will increase the number of automatic teller machines (ATMs) among other goals.
The 33 Nigerian MFIs that reported 2010 data to the US-based Microfinance Information Exchange (MIX) held an aggregate gross loan portfolio of USD 88.2 million disbursed to approximately 582,000 borrowers.
By Charlotte Newman, Research Associate
About the Central Bank of Nigeria
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 November 2011, CBN reports total assets of NGN 9.77 trillion (USD 61.9 billion).
Sources and Additional Resources:
The Nation: “New Banking Laws Underway, Says CBN Governor,” http://www.thenationonlineng.net/2011/index.php/news-update/40060-new-banking-laws-underway-says-cbn-governor.html
MicroCapital.org story, March 22, 2012, “MICROCAPITAL BRIEF: Mobile Money Service Paga Receives $2m Grant from Enhancing Financial Innovation and Access (EFInA) to Promote Financial Inclusion in Nigeria,” https://www.microcapital.org/microcapital-brief-mobile-money-service-paga-receives-2m-grant-from-enhancing-financial-innovation-and-access-efina-to-promote-financial-inclusion-in-nigeria/#more-17881
MicroCapital.org story, March 7, 2012, “MICROCAPITAL BRIEF: Nigerian Microfinance Bank Transactions With Traditional Banks Excluded from Cash Limit Policy,” https://www.microcapital.org/microcapital-brief-nigerian-microfinance-bank-transactions-with-traditional-banks-excluded-from-cash-limit-policy/
MicroCapital.org story, 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-nigeria-to-create-microfinance-development-fund-in-2012/
MicroCapital Universe Profile: Central Bank of Nigeria
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Central+Bank+of+Nigeria+%28CBN%29
Browse the MicroCapital Universe and add your entry to the wiki at https://www.microcapital.org/microfinanceuniverse/
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