The Central Bank of Nigeria (CBN) may soon finalise its verification exercise on the 121 microfinance banks that were issued provisional licence last year.
BusinessWorld Intelligence can reveal that the apex bank had examined and verified the books of a significant number of them and is satisfied with the outcome. After the conclusion of the verification exercise, it was learnt that the apex bank will announce to the public, those who were able to scale through.
Last year, CBN revoked the licences of 224 microfinance banks nationwide because they were found to be ‘terminally distressed’ and ‘technically insolvent’.
However, of the 224 MFBs, 121 microfinance houses were later granted provisional approvals by the apex bank, after they had made fresh capital injection and made significant loan recovery. The provisional approval, CBN said then, would only be effective for three months, after which comprehensive pre-licencing examination and capital verification will again be conducted before the new licence will be granted to those found eligible.
But more than a year after, the apex bank is yet to come out with the lists of those who meet the final licence requirements. Information has it that CBN had to give the affected banks enough time to reposition their banks, after it was revealed a lot of them are battling escalated un-repaid loans, among other challenges.
But when contacted last week, Mr. Muhammed Abdullahi, head, corporate affairs, CBN, said the regulatory body is still verifying some details of the affected banks, although, “a significant number of them has been verified,” he said.
According to him, “I can’t give you the accurate figure of the verified institutions now, but a significant number of them have been verified. Our examiners are always on the field everyday to ensure that they all comply with our regulations.”
Abdullahi added that the result of the exercise will be made public when the apex body concludes its verification exercise.
He stressed that there have been significant growth in the sub sector since the sanitization of microfinance sub sector commenced, promising that the CBN will continue to do everything possible to put microfinance market on the right track. “We know our job, so we don’t need anybody to tell us,” he said. “When we are through with examination and capital verification of the banks, we will let everybody know.”