Deadline approaches for Nigerian MFBs

Jan 05, 2011

Some microfinance banks (MFBs) in Nigeria are facing the possibility of losing their provisional licences, as a deadline for meeting standards approaches.

A total of 121 were granted temporary approval to continue operating in October, but the Vanguard notes conditions set by the Central Bank of Nigeria (CBN) need to be fulfilled by the end of January.

Requirements include the implementation of sound risk management systems and internal controls to prevent or delay avoidable losses.

A CBN source told the news provider MFBs unable to demonstrate they have made the necessary changes will be liquidated, stating: "At the expiration of the deadline, a comprehensive pre-licensing examination and capital verification will again be conducted before the new licence will be granted to those found eligible."

Last month, the Daily Trust reported MFBs in the country have grown their asset base by more than 100 billion Nigerian naira (€489 million) since 2006.