Microfinance Bank CEOs Jittery Over CBN Directive
- By Saka Khaliq
- Published March 28th, 2011
- News
- Unrated
SOME microfinance bank chiefs may lose their jobs if they fail a certification examination being administered by the Central Bank of Nigeria (CBN). Sources close to the microfinance sub-sector said the examination is causing some disquiet in the sub-sector. Other senior staff of microfinance banks will also face certification examination just like the CEOs. They also risk losing their jobs if they fail the examination.
As part of the effort of the CBN to create skilled manpower in the microfinance market, chief executives of microfinance banks nationwide are expected to sit for microfinance certification examination next month, BusinessWorld can now reveal.
The microfinance certification examination is being conducted by Chartered Institute of Bankers of Nigeria (CIBN) on behalf of CBN. BusinessWorld gathered that the examination is going to take place between 5th and 8th of April, 2011 where every operator is going to be examined on how to properly run a successful microfinance bank. A CIBN source said, “The examination is in two modules. The first module is for those who failed last year, as well as the new managers that did not take part in last year’s examinations. The second module is for those who passed last year’s examination.”
However, investigation shows that staff of MFBs are expected to write exams on fundamentals of microfinance banks, managing MFBs, financial analysis and financial performance monitoring of MFBs, product development and marketing, risk management by microfinance banks, among others. Meanwhile, the apex bank deemed it fit to subject operators to this examination as well as certify them, after it was revealed that lack of adequate skilled manpower in microfinance industry led to crisis in the sub-sector. While majority of microfinance banks’ managers were running their banks like commercial banks, were giving out credit without subjecting customers to proper scrutiny to ascertain their creditworthiness. The inability of credit takers to repay escalated their bad loans thus affecting their liquidity and financial positions.
And in order to guard against such problems, CBN had mandated all managers of MFBs to take the examination or risk sanctions.
Mr Kashim Olanrewaju, managing director, Afribank Microfinance Bank, while speaking with BusinessWorld said the examination is going to allow managers of microfinance banks run their banks professionally.
He noted that “the examination is a step in the right direction and I think after the examination, staff of MFIs must have been exposed to several ways of managing a bank. If operators implement what they have learnt it will not only return microfinance banks to the part of profitability, it will indirectly increase confidence of Nigerians in microfinance services.
As part of the effort of the CBN to create skilled manpower in the microfinance market, chief executives of microfinance banks nationwide are expected to sit for microfinance certification examination next month, BusinessWorld can now reveal.
The microfinance certification examination is being conducted by Chartered Institute of Bankers of Nigeria (CIBN) on behalf of CBN. BusinessWorld gathered that the examination is going to take place between 5th and 8th of April, 2011 where every operator is going to be examined on how to properly run a successful microfinance bank. A CIBN source said, “The examination is in two modules. The first module is for those who failed last year, as well as the new managers that did not take part in last year’s examinations. The second module is for those who passed last year’s examination.”
However, investigation shows that staff of MFBs are expected to write exams on fundamentals of microfinance banks, managing MFBs, financial analysis and financial performance monitoring of MFBs, product development and marketing, risk management by microfinance banks, among others. Meanwhile, the apex bank deemed it fit to subject operators to this examination as well as certify them, after it was revealed that lack of adequate skilled manpower in microfinance industry led to crisis in the sub-sector. While majority of microfinance banks’ managers were running their banks like commercial banks, were giving out credit without subjecting customers to proper scrutiny to ascertain their creditworthiness. The inability of credit takers to repay escalated their bad loans thus affecting their liquidity and financial positions.
And in order to guard against such problems, CBN had mandated all managers of MFBs to take the examination or risk sanctions.
Mr Kashim Olanrewaju, managing director, Afribank Microfinance Bank, while speaking with BusinessWorld said the examination is going to allow managers of microfinance banks run their banks professionally.
He noted that “the examination is a step in the right direction and I think after the examination, staff of MFIs must have been exposed to several ways of managing a bank. If operators implement what they have learnt it will not only return microfinance banks to the part of profitability, it will indirectly increase confidence of Nigerians in microfinance services.
