By Amaka Agwuegbo
Operators in the microfinance sector have called on the Central Bank of Nigeria (CBN) not to outsource the examination of microfinance banks (MFBs).
With the increasing incidents of closure of some MFBs, Vanguard sought the views of some operators if, due to the large number of players in the sector, the CBN should outsource their examination as it did in the days of community banks.
Speaking with Vanguard, Mr. Phillip Okuabor, Managing Director, Citigate MFB, noted that the aim of the examination may be defeated if individual morals are compromised.
â€œThe examination helps to highlight what the MFBs are not doing well. If the CBN outsources the examination, it means someone will pay for it. Is it the CBN or MFBs that will pay for it? Even if MFBs are to pay for the services, it may go on well initially but because each person has a price, the whole effort may be compromised.
â€œWhen the community banks were being supervised by the board of the National Board for Community Banks, people cried out, saying it was better for the CBN to do so. Today, the CBN is doing the supervision and people are crying again. I really must say that the CBN has honestly tried. It is a Herculean task to supervise over 800 MFBs. The OFID in CBN is a very large department and the staff is knowledgeable. I donâ€™t know what else operators want because it would amount to over regulation.â€
The Managing Director of Port-Harcourt-based Maxitrust MFB, Mr. Emeka Anekwe, believes there is no reason for the CBN to outsource the examination.
According to him, â€œI strongly oppose the outsourcing since there is no basis for the CBN to contract out the examination because it is capable of carrying out its functions. Remember that at a point in the banking sector, there were over 80 commercial banks with numerous branches and the CBN conducted their examination and supervision. So, I wonder why the examination of MFBs should be contracted, except someone is trying to create jobs for some people.â€
When Vanguard contacted the office of the Other Financial Institutions Department (OFID), of the CBN, its Deputy Director, Mr. William Ogumba, strongly opposed the outsourcing of MFBsâ€™ examination, explaining that MFBs should not be domiciled outside the CBN since their examination is just one of the functions of the CBN.
â€œIf you want the examining, accepting and analyzing the returns, licensing, approval, change of names, etc, to be outsourced, then, it means you want to take MFBs from CBN and put in another body like is obtainable in Ghana.
â€œRather than outsourcing and apart from OFID, the CBN can create another department that would focus primarily on MFBs. This way, they will have greater concentration since all they will dream and think about is microfinance. This is because, if it requires equip-ment, the CBN will bring in the needed equipment and if it is numbers, then we will increase the number of people.â€