The Central Bank of Nigeria (CBN), Nigeria’s central banking authority, reportedly plans to announce new capital base minimums for microfinance banks (MFBs) by the end of June. A new capital requirement is expected to be established for those operating at the national level at NGN 2 billion (USD 12.8 million); the minimum for those at the regional level will decrease to NGN 100 million (USD 640,000) from NGN 1 billion (USD 6.4 million); and the minimum for those at the rural level, with one branch, will remain unchanged at NGN 20 million (USD 128,000).
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MICROCAPITAL BRIEF: Central Bank of Nigeria’s (CBN’s) Cash Withdrawal Limit Expected to Impact Microfinance Institutions (MFIs)
The Central Bank of Nigeria (CBN) recently issued limits on daily cash withdrawals by individuals and corporate customers of NGN 150,000 (USD 962) and NGN 1 million (USD 6,417), respectively, effective June 1, 2012.
MICROCAPITAL BRIEF: Central Bank of Nigeria (CBN) Governor Explains Delay in Microfinance Regulatory Framework
Central Bank of Nigeria (CBN) Governor Mallam Sanusi Lamido Sanusi has reportedly explained the delay in the release a proposed microfinance regulatory framework saying, “if we are going to have 2,000 microfinance institutions, I want to know that we have the capacity to regulate and supervise those institutions” [1].
MICROCAPITAL BRIEF: Association of Micro Entrepreneurs of Nigeria (AMEN), Small and Medium Enterprise Development Agency of Nigeria (SMEDAN), Central Bank of Nigeria (CBN) Promote Small Business Ventures, Financial Inclusion to Combat Youth Unemployment
The Association of Micro Entrepreneurs of Nigeria (AMEN) recently announced plans to work with two government agencies, the Small and Medium Enterprise Development Agency of Nigeria (SMEDAN) and the Central Bank of Nigeria (CBN), to combat youth unemployment in the country by encouraging young Nigerians to engage in small business ventures.
MICROCAPITAL BRIEF: Central Bank of Nigeria (CBN): No More Time For Microfinance Banks (MFBs) to Recapitalize
The Central Bank of Nigeria (CBN) recently announced that it will not allow 121 microfinance banks (MFBs) that received provisional operating licenses in October 2010 more time to recapitalize. CBN gave the 121 MFBs, the surviving portion of 224 MFBs that had their operating licenses revoked in October 2010, a deadline of January 31 to increase their minimum capital from NGN 10 million (USD 64,200) to NGN 20 million (USD 131,000), shutdown branches engaging in illegal activities and embrace “good” corporate governance.
MICROCAPITAL BRIEF: Central Bank of Nigeria (CBN) Directs Microfinance Banks to Adopt Technology and Shared Service Platforms, Hints at New Microfinance Policy Framework
The Central Bank of Nigeria (CBN) recently mandated that microfinance banks (MFBs) adopt information technology infrastructure and utilize shared service providers—organizations that provide services such as cash processing and currency sorting for multiple banks—by June 2011 as concerns over struggling MFBs persist. CBN reportedly will offer financial assistance to MFBs to facilitate compliance with the directive. Use of the shared service platforms is also expected to help MFBs reduce operating expenses.
MICROCAPITAL BRIEF: Central Bank of Nigeria (CBN) Reviews Efforts to Encourage Microfinance, Discusses Challenges
The Central Bank of Nigeria (CBN), Nigeria’s central banking authority, has provided an overview of the bank’s strategies that have been implemented thus far in efforts to aid in the growth of the microfinance sector of the country. These include the establishment of: the Microfinance Advisory Board (MAB) in 2005 to coordinate stakeholder interventions in microfinance; National Microfinance Policy Consultative Committee (NMFPCC) in 2006 to aid in implementing policy; Inter-Agency Technical Committee on the Implementation of the Microfinance Policy to address technical issues related to policy implementation; and the Entrepreneurship Development Centres in Lagos, Onitsha and Kano in 2008 to assist in the capacity building of microfinance institutions (MFIs).
MICROCAPITAL BRIEF: Central Bank of Nigeria (CBN) Honors Obioma Liyel-Imoke, Founder of POWER, For Empowering Women at Nigeria’s Fifth Annual Microfinance Conference and Entrepreneurial Award Ceremony
The Central Bank of Nigeria (CBN) recently honored Obioma Liyel-Imoke, the first lady of Cross River State and founder of microlender Partnership Opportunities for Women Empowerment Realization (POWER), with the Best Support First Lady for Women Empowerment award for the second consecutive year at the country’s fifth Annual Microfinance Conference and Entrepreneurial Award Ceremony.
MICROCAPITAL BRIEF: Central Bank of Nigeria (CBN) Highlights Failings of Local Microfinance Industry, Outlines Strategy Going Forward
Femi Fabamwo, Director of the Other Financial Institutions Department at the Central Bank of Nigeria (CBN), reportedly has said that mission drift at some microfinance banks, weak capacity for lending, poor understanding of the microfinance concept and inefficient delivery methodologies are some of the reasons why 103 microfinance institutions (MFIs) are being liquidated by the Nigeria Deposit Insurance Corporation (NDIC). Mr Fabamwo cited MFIs “operating like ‘micro-commercial banks’ with flamboyance, fleets of branded cars and high expenditure profile; hard impact of the global financial turbulence of 2008/2009; weak capitalization; poor corporate governance…and weak internal controls” as additional reasons reform is needed in Nigeria’s microfinance sector.
MICROCAPITAL BRIEF: Nigeria Federal Government Supports Central Bank of Nigeria (CBN) to Establish Microfinance Development Fund
Nigeria’s President Goodluck Jonathan recently announced at the country’s fifth Annual Microfinance Conference and Entrepreneurial Award Ceremony that the federal government would support the Central Bank of Nigeria’s (CBN’s) plan to establish a Microfinance Development Fund dedicated towards developing the country’s microfinance sector.
MICROCAPITAL BRIEF: Central Bank of Nigeria (CBN) Gives Provisional Approval for 121 New Microfinance Bank (MFB) Licenses
After announcing that Nigerian microfinance banks (MFBs) would have to fulfill stricter capital requirements in order to obtain licenses, the Central Bank of Nigeria (CBN) has begun to grant provisional approval for new licenses to approximately 121 out of the 224 MFBs whose licenses were revoked earlier this year.
MICROCAPITAL BRIEF: Microfinance Banks (MFBs) Whose Licenses Were Recently Revoked by the Central Bank of Nigeria (CBN) May Reapply Under Stiffer Requirements
The 224 microfinance banks (MFBs) whose licenses were recently revoked by the Central Bank of Nigeria (CBN), Nigeria’s central banking authority, must satisfy a new requirement of a minimum capital base of NGN 100 million (approximately USD 650,000) and NGN 2 billion (USD 13.1 million) respectively for unit and state MFBs if they wish to obtain new licenses to resume lending.
MICROCAPITAL BRIEF: More Details Emerge After Examination of Microfinance Institutions (MFIs) by Central Bank of Nigeria (CBN) and Nigeria Deposit Insurance Corporation (NDIC)
Following growing complaints of fraudulent practices leveled against several microfinance institutions (MFIs) and the failure some, the Central Bank of Nigeria (CBN) and Nigeria Deposit Insurance Corporation (NDIC) conducted an examination of the sector, which has revealed some irregularities and unethical practices.
MICROCAPITAL BRIEF: Central Bank of Nigeria (CBN) Organizes Mandatory Certification Training Program for Operators of Microfinance Institutions (MFIs)
The Central Bank of Nigeria (CBN) has organized a mandatory certification training program for microfinance practitioners. According to Emma Okoidegun, the senior manager of the Development Finance Office of CBN, the objective of the certification program, which was held simultaneously in 24 centers in the country, was to provide guidelines for microfinance operations across the nation. This training program is in response to the deteriorating condition of the microfinance sector in Nigeria.
MICROCAPITAL BRIEF: Regulation Restructuring by Central Bank of Nigeria (CBN) May Harm Microfinance Banks
The Central Bank of Nigeria (CBN) announced plans to repeal universal banking by September of 2011. Universal banking, introduced to Nigeria in 1999, allows a bank to function in all sectors under a single body of regulation [1]. The CBN would revert to specialized banking, its pre-1999 regulation structure, where banks are licensed to act in a single sector. This new structure would include microfinance-specialized banks as their own category. Samuel Oni, CBN Director of Banking Supervision, said the regulatory reform would reduce operating risk and bring the CBN closer in line with the International Financial Reporting Standards [2], a body of best practices maintained by the International Accounting Standards Board.
MICROCAPITAL BRIEF: Editorial in Nigeria’s Daily Trust Urges Central Bank of Nigeria (CBN) to Tighten Regulation of Microfinance
In a recent op-ed piece published in Nigeria’s online Daily Trust, Ms Ijeoma Kalu urges the Central Bank of Nigeria (CBN) to tighten regulation of the microfinance industry and ensure “that only professionals are permitted to practice.”
MICROCAPITAL BRIEF: Central Bank of Nigeria (CBN) Developing a Framework to Regulate Microfinance Banking in the Country and Keep “Monsters” Out of the Industry
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.
MICROCAPITAL BRIEF: Central Bank of Nigeria (CBN) to Handover Debtors of Distressed Microfinance Banks to Economic and Financial Crimes Commission (EFCC) and Revoke Operating Licenses of Microfinance Banks That Have Closed Operations for More Than Six Months
An investigation by Vanguard, a newspaper in Nigeria, indicates that the Central Bank of Nigeria (CBN) is currently compiling names of individuals who have received loans from microfinance banks and have failed to repay those funds.