At the fourth Microfinance Conference in Abuja, Nigeria, the governor of the Central Bank of Nigeria (CBN), Mr Mallam Sanusi Lamido Sanusi, announced that all microfinance bank CEOs would be required to pass a CBN administered exam in order to continue managing their banks.
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MICROCAPITAL BRIEF: The Central Bank of Nigeria (CBN) Investigates “Fraudulent Practices” at Five Recently Failed Nigerian Microfinance Banks
Mr. Olufemi Fabanwo, Nigeria’s (CBN) Director of the Other Financial Institutions Department, told news agencies that the central bank will investigate five recently failed microfinance banks and, if any operators are found to be fraudulent, he or she will be handed over to the EFCC, the country’s law enforcement agency. Operators are considered fraudulent if they have no state license to engage in banking activities. The five banks are: Integrated Microfinance Bank, KFC Microfinance Bank, Bristol Microfinance Bank, Unique Microfinance Bank, and Milestone Microfinance Bank, all based in Lagos.
MICROCAPITAL BRIEF: Vanguard News Claims Central Bank of Nigeria (CBN) Will Revoke Operating Licenses of Several Microfinance Banks
According to a Vanguard News Online article, the Central Bank of Nigeria (CBN) has decided to revoke the operating licenses of a number of illiquid microfinance banks [1,2].
MICROCAPITAL BRIEF: Central Bank of Nigeria (CBN) Encourages Microfinance Banks (MFBs) To Cut Costs
At a meeting between microfinance banks (MFBs) and the Central Bank of Nigeria (CBN) in Lagos recently, CBN Governor Lamido Sanusi urged MFBs to adopt cost cutting measures, including the reduction of staff. Also, Govenor Sanusi stated that “MFBs should not mismatch assets and liabilities. Typically, MFBs get deposits of 30 days, however, they end up using [the 30 day deposit] to create loans of six months to one year.” These suggestions are in response to the recent liquidity problem among the 1,000 MFBs in Nigeria. In support of these measures, Director Femi Fabamwo of Other Financial Institutions Department (OFID), which is a division of CBN, stated, “The aim is to reduce the rate at which some of these banks fold up because it seems like most of them are competing with commercial banks… If [MFBs] can maintain low cost [structures], they [will] be able to improve their operations.”
MICROCAPITAL BRIEF: Central Bank Of Nigeria (CBN) Issues Guidelines On Operation Of The Microcredit Fund
The Central Bank of Nigeria (CBN) recently presented guidelines to state governments on how they may access the monies held by its Microcredit Fund. Established in 2008, the Microcredit Fund, a national government fund which was originally funded with contributions from state governments, holds NGN 50 billion (USD 333.94 million) and is ready to be operationalized. The Microcredit Fund represents the national government’s effort to securely distribute state monies in order to develop the microfinance sector. The general scheme implements several layers of bureaucracy in order to ensure a secure channel by which microenterprises may ultimately access monies from the Microcredit Fund and perhaps is a reflection of the recent turmoil in the nation’s microfinance sector.[2] State governments must first set up a separate account with a commercial bank which is intended to hold the monies received from the Microcredit Fund. The account is then used by state governments in partnership with local banks to disburse loans to microenterprises that fit within the parameters of the Microcredit Fund’s objectives. Once disbursed, it is the responsibility of state governments to establish a mechanism to monitor and supervise the repayment of the loans and, out of the repaid proceeds, pay back to the Microcredit Fund a percentage of the returns. These guidelines are meant to responsibly develop the microfinance sector and ensure compliance by state governments and commercial banks with existing microfinance regulations.
MICROCAPITAL.ORG STORY: Central Bank of Nigeria (CBN) Considering Outsourcing the Supervision of Microfinance Banks (MFBs)
Central Bank of Nigeria (CBN) governor, Mallam Lamido Sanusi, said recently, while speaking in a meeting at corporate headquarters, that the supervision of the 800+ microfinance banks (MFBs) in Nigeria may be outsourced.
MICROCAPITAL STORY: Central Bank of Nigeria (CBN) Celebrates New Microfinance Licenses and Challenges Governments at 3rd Annual Microfinance and Microfinance Entrepreneurship Awards
The Central Bank of Nigeria (CBN) announced at the 3rd Annual Microfinance and Microfinance Entrepreneurship Awards Ceremony that it has licensed a total of 840 microfinance institutions throughout the country in, 25 of which have been licensed since September 2008. CBN Governor Chukwuma Soludo stated that despite this increase in MFIs, as well as an increase in branches of universal banks by two thousand since 2003, access to formal finance in Nigeria remains at 35 percent. Local and state governments were challenged to establish and mainstream microfinance programmes while praising particular microfinance initiatives such as the Agricultural Credit Guarantee Scheme (ACGSF), the insurance deposits for microfinance by the Nigeria Deposit Insurance Corporation (NDIC) as well the development of a credit bureau, the Credit Reference Company.
MICROCAPITAL STORY: Central Bank of Nigeria (CBN) Declares that New Microfinance Bank Licenses Will Only Be Granted Only to Those Operating in Rural Areas
The Central Bank of Nigeria (CBN) has announced a new condition of receiving Microfinance Bank (MFB) licenses. Going forward, only microfinance institutions that are ready to operate in rural areas will be given licenses. This new condition follows the recent statements, reported on MicroCapital, by Charles Soludo, Governor of the CBN, that only 12 of 36 Nigerian states contribute to microfinance. On a combined basis, these 12 states have contributed USD 1.26 million to microfinance. The new condition is an attempt to create more balance in the availability of financial services across the rural and urban areas. Mr. Tunde Lemo, Deputy Governor, Financial Sector Surveillance, CBN, said that the central bank will give special, rapid consideration to any microfinance institutions seeking to begin operations in rural, underserved states.
MICROCAPITAL STORY: Nigeria’s Delta State, Oceanic Bank International and the CBN Partner to Create Microcredit Bank Account
The Nigerian Delta State government is collaborating with the Central Bank of Nigeria (CBN) and Oceanic Bank International (OBI) to create the Delta Oceanic Micro-Credit Scheme Account (DOMSA), it was revealed on October 15th, 2008. In signing a Memorandum of Understanding (MoU), the Delta State government contributed N50 million (USD 424 thousand) in the form of loans to support the first phase of a microcredit trust fund to OBI, while OBI will commit N200 million (USD 1.7 million) to microcredit finance.
MICROCAPITAL STORY: Central Bank of Nigeria (CBN) Approves Integrated Microfinance Bank Limited of Nigeria (IMFB) to Become a Nigerian “State Microfinance Bank”
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.
MICROCAPITAL STORY: Central Bank of Nigeria (CBN) Closes Failed Community Banks
The Central Bank of Nigeria (CBN) directed Community Banks (CBs) that have not met the recapitalization goal of NGN 20 million (USD 169,635) to submit their closing documents by the end of 2007. As part of Nigeria’s national Microfinance Policy launched by CBN in December 2005, the recapitalization directive was a requirement for CBs to operate as microfinance banks.
MICROCAPITAL STORY: Central Bank of Nigeria (CBN) Approves Conversion of Community Bank into Microfinance Institution (MFI)
The Central Bank of Nigeria (CBN) has approved the conversion of the Olabisi Onabanjo University Community Bank Limited into a microfinance bank. The community bank has operated on the campus of Olabisi Onabanjo University in Ago-Iwoye, Nigeria since March of 2003, and the majority of its shareholders are affiliated with the university. One source reports that, in its first year in business, the bank made a surplus that was “far in excess of its total paid up capital,” but no other sources were found to corroborate this information and no further information was found on the OOU Community Bank.
MICROCAPITAL STORY: Ikole Microfinance Bank Ltd. Receives Provisional Approval by Central Bank of Nigeria (CBN) for Microfinance Operations
In accordance with the Nigerian legal requirement that all microfinance institutions (MFIs) operating in Nigeria must hold a MFI license, the Central Bank of Nigeria (CBN) has provided Ikole Microfinance Bank Ltd. with provisional approval to operate as a Nigerian MFI. The approval was given in a letter signed by Fred Oluwalademi, Director of CBN’s Other Financial Institutions Department on July 23, 2007. The letter comes two months after Ikole Microfinance first applied for its operating license.
Central Bank Nigeria (CBN) Prepares for Microfinance Certification Programme to Commence in 2008
Following news that the Central Bank Nigeria (CBN) would impose new regulations on microfinance banks last year (see article on microcapital.org) the CBN is preparing a systematic certification programme for microfinance banks operating in Nigeria. When the regulations were announced last year the deadline imposed for microfinance institutions (MFI’s) to comply with the new measures and convert to microfinance banks was December 2007. Once this deadline has passed and the micro-banks are all regulated, the certification process will begin (January 200). It forms part of a capacity building programme to try and make the domestic microfinance industry more robust and transparent. The CBN intends to base the certification on international best practices, and expects to enforce compliance with the certification requirements within 3 years.
MICROCAPITAL BRIEF: 15 Mobile Money Firms Acquire Licenses from Central Bank of Nigeria
The governor of the Central Bank of Nigeria, Godwin Emefiele, reportedly has announced that, “We have so far provided 15 licenses to several mobile money operators who are working to increase access to finance using digital channels.” This is part of an effort to open 500,000
MICROCAPITAL BRIEF: Nigeria’s Abia State Opening Microfinance Bank to Support Agriculture
The government of the state of Abia, which is located in southeastern Nigeria, is planning to open a microfinance bank in October 2018. The institution
MICROCAPITAL BRIEF: Central Bank of Nigeria, Service Providers Partner to Establish 500k Financial Service Points via Shared Agent Network Expansion (SANE) Program
Under Nigeria’s new Shared Agent Network Expansion (SANE) program, the Central Bank of Nigeria, mobile-money operators, retail banks and “super agents” – organizations of 50 or more financial services agents – have agreed to create a network of 500,000 agents to offer services such as transferring funds to and from family members, vendors and the government. As part of the scheme, 50 million people will acquire biometric-based
MICROCAPITAL BRIEF: Nigeria’s Lagos State Creates IBILE Microfinance Bank to Boost Lending to MSMEs
The government of the Nigerian state of Lagos recently established Ikeja Badagry Ikorodu Lagos Island Epe (IBILE) Microfinance Bank with the aim of boosting economic growth and reducing poverty.