By Amaka Agwuegbo
The Managing Director Â Â Â of Fieldreams Micro-finance Bank, Mr. Cally Odoemenam, has commended the move by the Central Bank of Nigeria, CBN, to turn the
heat on microfinance banks, MFBs, saying such will breed professionalism and eliminate the increasing rate of illiquidity in some microfinance banks.
Speaking with Vanguard, Odoemenam said though the move is an extension of the on-going cleansing in the commercial banking sub-sector, but the CBN should do the house cleaning in a manner that would not rub off on those that are still credible and liquid.
â€œIâ€™m in support of what the CBN is doing because the sub-sector will be the better for it, customers will be better served, and the bad eggs will be removed for the good ones to shine. If such can happen to the main stream banks, then nothing stops it from happening in the microfinance sub-sector because it is an extension of the on-going reforms in the commercial banking sub sector.
Speculations are rife that the CBNâ€™s move to review the activities of the over 800 MFBs in the country is not unconnected to the rising cases of illiquidity in some of the banks while some capitalize on the concentration of emphasis on money deposit banks to flout some existing rules and regulations in the sub-sector.
In a recent workshop on commercial microfinance and savings mobilization for microfinance banks and institutions organized by the World Bank/Nigeria MSME Project, in collaboration with the Central Bank of Nigeria (CBN), the Deputy Governor, Operations, CBN, Mr. Tunde Lemo, who was represented by Director, CBN, Mr. Joe Alegieuno, the CBN threatened to sanction any microfinance bank or institution that continues to flout the regulatory and supervisory requirements in a bid to ensure the safety of depositorsâ€™ fund.
â€œThe CBN is undertaking aggressive supervisory and oversight functions on the licensed microfinance banks and it is investing in capacity building through the certification programme scheduled to commence very soon.â€
Continuing, Odoemenam said because a number of people can raise the N20m capital base for a microfinance bank, most people in the sector lack professionalism, donâ€™t have the needed skills and competence and donâ€™t apply the principles and ethics of commercial microfinance.
â€œSome people donâ€™t understand the commercial aspect of matching assets and liabilities. All they do is take depositorsâ€™ fund and invest in real estates, which is a clear mismatch because they run into liquidity problems. Once you have liquidity problems, the CBN will be after you.â€