Don't Miss


Home   >   Business   >   Industries   >   Insurance   >   NDIC, judiciary, police to prosecute operators, debtors of 103 MFBs

NDIC, judiciary, police to prosecute operators, debtors of 103 MFBs

By on October 4, 2013

The Nigeria Deposit Insurance Corporation, NDIC has disclosed that plans are underway to  prosecute operators and debtors who contributed to the collapse of 103 Micro Finance Banks (MFBs) in 2012.

The Managing Director / Chief Executive Officer, Alhaji Umaru Ibrahim, who revealed this, said NDIC in collaboration with judiciary and the police authorities had concluded plans to prosecute operators and debtors who were culpable for the breach of trust and abuse of office that contributed to the collapse of the 103 MFBs in 2010.

A case in point, he said, was that of Integrated MFB which accounted for over 60 percent of the fund lost in the subsector. “This would go a long way to institute the right attitude and financial discipline in the subsector for the future” he added.

Ibrahim also emphasized the need for adequate risk management framework and sound corporate governance practices as well as self regulation and market discipline to promote confidence and stability in the micro finance subsector. He pointed out that MFBs should be prepared not only to comply with the IFRS financial reporting standards but also to seek deferment on the date while negotiating with FIRS on the exemption from VAT and other tax related matters.

On the MFB regulatory reform guidelines, he advised the National Association f Microfinance Bankm,  NAMB to see the reform as a welcome development as the new licensing regime which allowed the participation of state and local governments should be viewed as a relief and positive contributions toward growth and inclusive ownership. This would encourage more grassroots support at policy making level considering all the benefits associated with such a review for the subsector.

He advised the MFBs to take advantage of the N220 billion MSME fund recently launched by the  Central Bank of Nigeria, CBN for on-lending in the subsector. The fund, he said, would inject the much needed liquidity and raise the standard of entrepreneurship in commerce and agriculture value chain in the country at the rural settings.

Meanwhile, the NAMB President, Chief Jethro M. Akun (MON) has commended the NDIC for its technical and capacity building efforts toward ensuring safety, stability and soundness of the MFB sub sector and called for more collaboration between the regulatory authorities and the association.

Chief Akun, however highlighted the various challenges bedevilling the association by the new governing structure of each category of MFB, particularly the abolition of branches and cash centres for unit MFB, the conversion of all MFBs with over 50 shareholders to Public Limited Company (PLC), compliance with IFRS and removal of NAPEP funds from the books of the MFBs.

He therefore appealed to the corporation to allow the MFBs to have access to the NDIC N16 billion intervention fund to resolve illiquidity challenges facing the sub sector, pointing out that the 6 million customer base of the MFBs could be increased with the support of the Corporation in the areas of advocacy, client services, sustainability, capacity building and accountability.

 

 

 

[Vanguard]