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Most microfinance banks are sound – CBN

By on February 20, 2014

The Central Bank of Nigeria has said most of the microfinance banks in the country are in sound health and that their performance is generally satisfactory.

While noting that the microfinance sub-sector was being effectively regulated, the CBN pointed out that it was also being supervised by the Nigeria Deposit Insurance Corporation.

The Director, Other Financial Institutions Supervision Department, CBN, Mr. Olufemi Fabamwo, said in a statement that the central bank had put in place measures to ensure that MFBs comply with the regulator’s guidelines.

“All MFBs are examined at least once a year, while some are examined more than once, depending on the exigencies of the situation, with follow-up visits to ensure that examiners’ recommendations are implemented and corrective actions are taken by the operators of the MFBs in order to engender stability in the microfinance space,” he said.

He also said the CBN was committed to the growth of the industry, and that there was no plan to shut down 600 MFBs in the country, as indicated in a recent report.

The CBN director noted the report could result in the “de-marketing of microfinance banks and thus, undermine public confidence which is capable of precipitating panic withdrawals by depositors and investors in the MFBs.”

While advising the investing public and depositors of microfinance banks not to panic, he said the report could adversely affect the growth of nascent microfinance industry in the country.

Fabamwo, however, solicited the unwavering support of depositors and the investing public in the microfinance industry.

 

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