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CBN agree to review recapitalisation of MFBs

07 February 2013, 14:10

Abuja - The Central Bank of Nigeria (CBN) and National Association of Micro Finance Banks (NAMB) have agreed to set up a technical committee to resolve ``grey areas’’ in the recapitalisation of micro finance banks.

Mr Jethro Akun, the National President of NAMB told the News Agency of Nigeria (NAN) in Abuja on Thursday that the two reached the agreement in a meeting, chaired by CBN Governor, Malam Sanusi Lamido Sanusi, on Tuesday.

Akun said that the meeting discussed challenges facing operators of Micro Finance Banks (MFBs) in complying with the Revised Microfinance Policy Framework (RMPF).

He said that the meeting also discussed extensively issues on the capital requirements for each category of MFBs and existing branches as well as cash centres.

``We discussed and we finally agreed that as partners who are working toward financial inclusion, providing access to finance for development and employment for many unemployed people, there is need for us to set-up a technical committee.

```The committee is made up of CBN and NAMB to look at grey areas of policy for the smooth operation of the micro finance sub-sector and the benefit of the entire society.

``We all acknowledged the contribution of micro finance banks to the economy and we are all happy that the CBN governor is passionate about the development of the sub-sector,’’ he said.

Akun said that the meeting also agreed to look at ``any other thing seen as an impediment’’ to the smooth growth and expansion of the microfinance sub-sector.

NAN recalls that the CBN had given MFBs up till Dec. 31, 2012 to comply with its new stipulated minimum capital requirements.

The policy provides for three categories of MFBs, namely unit, state and national.

According to the CBN, a unit MFB licence is authorised to operate in one location and shall be required to have a minimum paid up capital of N20 million.

The unit MFB is also prohibited from having branches or cash centres.

In the second category, state MFB is authorised to operate in one state or the Federal Capital Territory (FCT) with a minimum paid up capital of 100 million.

The state MFB is allowed to open branches within the state or the FCT, subject to prior written approval for each new branch or cash centre.

In the third category, national MFBs are expected to have N2 billion and are allowed to open branches in all states of the federation and the FCT, subject to prior written approval for each new branch or cash centre.

NAN also recalls that the CBN had previously issued circulars threatening to revoke licences of MFBs operating unapproved branches and cash centres after the expiration of the Dec. 31, 2012 deadline.

However, till date, the apex bank has yet to sanction any defaulting bank.


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