The Nigeria Deposit Insurance Corporation (NDIC), an independent agency of the Federal Government of Nigeria which guarantees deposits to financial institutions, has reportedly begun compiling a list of some of the managers of the failed microfinance banks – whose licenses were recently withdrawn by the Central Bank of Nigeria (CBN) – with the aim of prosecuting them.
Earlier this year the CBN revoked the licenses of 224 microfinance banks accusing them of insolvency, poor operations management, high levels of non-performing loans, undercapitalization, poor board governance and corrupt management officials. The CBN later allowed microfinance banks to reapply under stricter requirements, and the majority were given provisional approval to re-open.
By Witt Gatchell, Research Associate
About Nigeria Deposit Insurance Corporation:
The Nigeria Deposit Insurance Corporation (NDIC) is an 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 their deposits, thereby helping to maintain financial system stability.
About Central Bank of Nigeria:
Central Bank of Nigeria (CBN), established in 1958, is Nigeria’s central banking authority. As defined by the 1958 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 July 2010, CBN reports total assets of NGN 7.37 trillion (the equivalent of USD 48.6 billion).
Sources and Additional Resources:
[1] Vanguard: “NDIC to prosecute MDs of failed microfinance banks” by Emma Ujah
http://www.vanguardngr.com/2010/12/ndic-to-prosecute-mds-of-failed-micro…
MICROCAPITAL BRIEF: Central Bank of Nigeria Revokes Licenses of 224 Microfinance Banks
https://www.microcapital.org/microcapital-brief-central-bank-of-nigeria-r…
MICROCAPITAL BRIEF: Central Bank of Nigeria (CBN) Gives Provisional Approval for 121 New Microfinance Bank (MFB) Licenses
https://www.microcapital.org/microcapital-brief-central-bank-of-nigeria-c…
MicroCapital’s Microfinance Universe profile: Nigerian Deposit Insurance Corporation (NDIC)
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Nig…
MicroCapital’s Microfinance Universe profile: Central Bank of Nigeria (CBN)
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Cen…
Browse the MicroCapital Universe and add your entry to the wiki at https://www.microcapital.org/microfinanceuniverse/
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