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CBN orders MFBs to display operating licences

By Amaka Agwuegbo
The Central Bank of Nigeria (CBN) has ordered micro-finance banks, MFB, operators to display their operating licences in their banking halls.


The Acting Director, Other Financial Institutions Department, CBN, Olufemi Fabamwo, gave this directive at the 2nd Committee of Microfinance Banks in Nigeria (COMBIN) Lagos zone, held recently in Lagos.

He said “We have already ordered MFB operators to display their licences in their banking premises, so that members of the public, who might want to do business with them would be able to discern and see. This would serve as notice to members of the public also to always ensure that they see a CBN licence or a letter granting final licence to MFBs before they transact any business with them.”

Commenting on the  rising incidence e activities of fake and unlicensed microfinance banks, Fabamwo said  that as soon as information gets to them, they would be apprehended and handed over to appropriate law enforcement agency.

“It is a concerted effort; we need members of the public to help us to identify them. We are only a few hundreds of people, so members of the public can also help in fishing them out. Once they see any bank practicing without licence, or did not display it, they should alert us immediately, so that we can hand them over to law enforcement agents.”

To further substantiate its intention, the CBN promised to publish names of licensed microfinance banks in order for the public to know those who are genuine and being supervised by CBN.

“Again, we also want to publish the list of licensed MFBs, so that members of public will be aware that these are being supervised by the CBN. But some of them are not literate enough or are not well to do enough to buy newspapers; hopefully, we will also do some jingles to advise them on what to do,” he said.

It would be recalled that a number of unlicensed MFBs have closed shop,inflicting heavy  loses on several depositors.
Lending credence to the Acting Director, OFID, the Managing Director of Imperial MFB, Mr. Ejike Azubuike, said those that have been identified as fake have been closed down with their officials handed over to the Economic and Financial Crimes Commission, EFCC.
“Also, the CBN has urged for the co-operation of the management and staff of genuine and registered MFBs in alerting the CBN of any unregistered MFB operating in our locality.

“And in facilitating in assisting the CBN identify such fake MFBs, the CBN has agreed to roll out a comprehensive list of all registered MFBs. With these steps put in place, I believe that fake microfinance banks would be phased out.” Azubuike said.

The Managing Director, Meridian MFB, Mr. Innocent Ezema attributed the situation to the gullibility of Nigerians who take in anything that comes their way.

“Our level of financial intelligence is still very low and people don’t ask questions. When someone walks up to you saying you will get N5,000 interest if you deposit N10,000 every month, you have to consider the authenticity of the investment. That is why the concept of Umana Umana banking of those days is still present today.

“My market intelligence tells me that most people don’t know the names of the microfinance banks that compel them open accounts. It is advisable to open and operate accounts for some time before you start asking for loans so as to enable you know the bank and for the bank to know you. People have to be careful where they put their money” he said.


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