THE Central Bank of Nigeria (CBN) has warned Nigerians to beware of some illegal operators in the microfinance market.
The CBN said it is aware of the activities of these illegal MFBs, stating that Nigerians should be extra careful before dealing with any microfinance bank.
These fake banks, according to the CBN, paraded themselves as real ones and dupe unsuspecting victims millions of naira.
According to a press release from the apex bank, signed by Mr. Olufemi Fabamwo, acting director, other financial institutions department (Ofid) five illegal and unregistered MFBs are operating in the country. He called on the people to avoid transacting business with these banks because doing so with the five fake banks can reduce the confidence level in the microfinance industry.  
The statement listed Almon MFB which is operating on the ground floor of a two storey building at kilometre 24, Lagos-Badagry expressway, Oto-Ijaniki, Lagos as a fake bank. It was however learnt that the bank recently closed down with millions of depositors’ funds trapped in the firm.
PS microfinance bank, operating at No 30, Ayo Ajayi Street, Oke-Ira, Ogba, Lagos was also listed among the illegal operators. BusinessWorld can reveal that the firm closed down three months ago, while the owners absconded with depositors’ money.
Meanwhile, a microfinance institution named ‘Green House’ located at no 58, Enitan Street, Aguda, Surulere was equally alleged by the apex bank  to be illegal, while Business Track MFB operating in Surulere was equally listed in the list of illegal banks.
However, in Osun State, Koffy Multipurpose Co-operative Society which was located at No 9, Anaye Street, Shago, Owena, Osun State was equally fingered among the illegal MFBs in the country.
The aforementioned banks have been reported to have extorted money from unsuspecting members of the public under the guise of being genuine MFBs. Depositors as a result lost huge sums of money to these illegal operators.
According to the CBN, “The aforementioned banks have not been licenced by the CBN. They have neither submitted any application for license nor have they been granted any kind of approval. They have, therefore, been operating illegally as microfinance banks.”
The apex bank explained that the action of these illegal operators is heinous, as this is capable of causing confidence crisis, which may adversely affect the operations of duly licensed MFBs.
Consequently, the regulatory body said, these unscrupulous person/companies have been reported to the appropriate law enforcement agencies for further investigation, apprehension and prosecution.                                                                                                   
While advising the public to deal with the duly licenced MFBs, the CBN urged Nigerians to demand the identification cards of MFBs staff and look out for their operating licence, or a letter from the CBN conveying final license before transacting business with anyone.
However, Fabamwo had at a recent event urged operators to display their operating licence in their business premises. This, according to him, would let the public determine whether a bank is genuine or fake.  He advised Nigerians to visit the CBN website or approach the nearest CBN branch to lodge their complaints.
It is pertinent to re-assure members of the public that the deposits in every licensed MFB are insured by the Nigeria Deposit Insurance Corporate (NDIC), he remarked.
The CBN official urged members of the publics to assist the CBN in finding the culprits behind the floating of this illegal financial institutions, adding that by doing so, the microfinance market would be sanitised and safe for investment.
Members of the public are hereby requested to report the activities of any illegal operator to the nearest CBN branch, the police or other law enforcement agencies for possible action, he stated.