CBN Reviews MFBs’ Capital Base
- By Saka Khaliq
- Published June 13th, 2010
- News
- Unrated
The Central Bank of Nigeria (CBN) has reviewed the capital base of Microfinance Banks (MFBs) in the country.
Under this development, micro finance institutions are classified into rural and urban with capitalisation of N50 million and N100 million respectively.
The present N20 million minimum capital base for MFBs has come under serious criticisms from industry analysts, who said the capitalisation is too small to operate a strong and vibrant outfit in the industry.
And as a result of liquidity challenges affecting the industry, the CBN consequently amended some sections of the existing policy to reflect the realities of the economic situations in the country.
A credible source in the industry said the new policy would be released later in the month or early July, this year, adding that the capital base increment is part of the amended sections in the policy. Some of the industry operators who confirmed the new development said they are already making efforts to comply with CBN’s directives.
Mr. Olutayo Adenekan, chairman, Association of Microfinance Banks, Lagos State chapter, said “we have been told by the CBN to increase our capital base because the apex bank is likely to increase the minimum capital base of MFBs in the new policy.”
Adenekan, who is also the chairman of Alstar Microfinance Bank, added that no matter what happens, operators especially in Lagos State are ready and prepared. There are 931 microfinance banks in the country at the moment of which Lagos State alone has 221.
Under this development, micro finance institutions are classified into rural and urban with capitalisation of N50 million and N100 million respectively.
The present N20 million minimum capital base for MFBs has come under serious criticisms from industry analysts, who said the capitalisation is too small to operate a strong and vibrant outfit in the industry.
And as a result of liquidity challenges affecting the industry, the CBN consequently amended some sections of the existing policy to reflect the realities of the economic situations in the country.
A credible source in the industry said the new policy would be released later in the month or early July, this year, adding that the capital base increment is part of the amended sections in the policy. Some of the industry operators who confirmed the new development said they are already making efforts to comply with CBN’s directives.
Mr. Olutayo Adenekan, chairman, Association of Microfinance Banks, Lagos State chapter, said “we have been told by the CBN to increase our capital base because the apex bank is likely to increase the minimum capital base of MFBs in the new policy.”
Adenekan, who is also the chairman of Alstar Microfinance Bank, added that no matter what happens, operators especially in Lagos State are ready and prepared. There are 931 microfinance banks in the country at the moment of which Lagos State alone has 221.
