By Amaka Agwuegbo
As part of the reforms in the banking industry, Managing Directors of microfinance banks (MFBs) will, in the nearest future, sit for Central Bank of Nigeria (CBN) organized exams with any manager who fails the test will cease to manage their banks.
Addressing MFB executives during the recent 4th Microfinance Conference held in Abuja , the CBN Governor, Mallam Sanusi Lamido Sanusi, disclosed that a training programme will commence in the first quarter of the year and any MFB that does not comply with the rules would have its license withdrawn.
Pointing out that the certification examination would be organized by the Chartered Institute of Bankers, CIBN, a CBN source who spoke on the condition of anonymity, said the aim of the examination is to build capacity in the MFB sector as most operators in the sector are from different background with various degrees.
â€œCapacity building is one of the things that is required in the MFB sector because we need to have a critical mass of knowledgeable and skilled personnel that would drive the sector.
â€œThis is as a result of the present situation we have in which operators in the sector are from different backgrounds and have various degrees. As a result, most of them not to understand the concept of micro-financing, which is responsible for their operating like commercial banks and this is not helping the sector.â€
The CBN source disclosed that the certification exams, which is part of the micro-finance policy framework, is not only for Managing Directors, but also for management staff as this will enable them have the knowledge and skills in the concept of micro-financing and also the methodology for delivering MFB policies.
â€œThe programme is to be basic enough and anyone who has paid attention in class should be able to pass the examinations. But if they donâ€™t, they will have one more chance too do a repeat programme, and if they still fail, the CBN has no choice but to advise the boards of their institutions about their poor performances.
The CBN source said that since competence is the CBNâ€™s watch word, the exams is aimed at serving the institutions better as it makes no sense for someone who lacks the basic requisite skills to be allowed to run a bank. He added that the certification programme would be handled by the CIBN, while the training would be handled by some CBN accredited training service providers.
â€œWe have selected interested parties and taken them through the train the trainer programme after which they would be accredited.
â€œThis is much like any professional examination like ICAN, so you can take your training wherever you like, but will sit for the various diets for the examinations. We expect that this would be a benchmark qualification to operate in the MFB sector and which would enable us to get that critical mass.â€
This certification examination has been well received by MFB operators, with most of the bank Managing Directors pledging their support and co-operation to the success of the exercise.
Lagos State Chairman, National Association of Microfinance Banks (NAMB), Chief Olutayo Adenekan, urged MFB operators to get ready for the certification examinations as it would help sanitise the sector.
â€œI agree that the CEOs, MDs chairmen of MFBs should take the exams and get certified because when we were being licensed, we were told by officials of the CBN that there would be a certification examination. So if anyone is not interested or is not good enough, such a person should drop out.â€
Also in support of the certificate examination is the MD of Havilah MFB, Mr. Rufus Olowole, who noted that the sector will be the better for it after the certification exams.
â€œThe examination is good and is aimed at improving capacity building in the MFB sector, so we canâ€™t do otherwise but co-operate since it is at the instance of the regulatory bodies. â€œI agree with the CBNâ€™s stand of sacking any MD that fails the examination because any MD that is worth his salt can never fail the exams because whatever will be taught should be below the existing qualification of such MDs, except for those who have not been involved in the banking and finance sector.
â€œThis is good way to get the MDs to be serious and we will not take it to be a mere exercise.â€
Pointing out that the certification examination would reveal operators that are committed to microfinancing, the MD of Aguda Tinun MFB, Mr. J. A. Akapo, noted that he is sure the sector would improve after the exercise.
â€œIt is a good and welcome development which would reveal operators that are committed to microfinancing and deter those that are not interested from venturing into it with the conclusion of the exercise.
â€œAlso, without the certificate, you will not be allowed to work as the MD or occupy any management position in any bank. Akapo concluded by saying that he has no objections about the CBN sacking any MD that fails the examinations because if they are given two opportunities and they fail, the best thing to be done is honourably leave the scene for a more qualified person.
While urging MFB operators to co-operate with the CBN, the Chairman, Aguda Tinun MFB, Mr. Rufus Oshodipe, praised CBN officials for initiating the certification examination as it proves that they are committed to sanitising the MFB sector. The Managing Director of Ikorudu Division MFB, Mr. Martin Nwankwo, while praising the certificate examination, said it would result in sanity in the sector, especially from the top echelon of management.
â€œThis would ensure that the best hands are the ones running the sector. My only concern is that the CBN should ensure that the exams are organized by professionals like ICAN, CIBN and other finance training institutions that would follow proper guidelines to ensure the credibility of the programme.
â€œAlso, the examination should be more of practical work and less of academics so as to get away from the Nigerian system of valuing paper qualification than practical skills and experience. It has to be practicable to what the person is expected to do, what he is doing and what he is going to do, particularly within the context of grass root financial empowerment.
I donâ€™t have any reservation with the CBN sacking any bank MD that fails the exams as the timetable and course outline would be there for all to follow. But the examination should be limited to micro-financing.
Some MFB customers who spoke on conditions of anonymity have these to say:
â€œThough micro-finance is not being regulated and monitored properly in most countries, but one good step that Nigeria initiated is licensing and regulating MFIs. But most importantly CBN must remember that taking an exam will never fulfill their objective rather, the MDs and CEOs should be trained and monitored regularly. Definitely a good initiative and other countries should observe the results.â€
Another customer responded thus: â€œPassing an examination per se will not make bad managers good. What needs to be done is to improve the quality of board members for them to know which reports that should come to them and how to analyse these reports for their decision making on their board responsibilties. â€œ
As the old Chinese proverb goes: The fish rots from the headâ€, thus, making it imperative for the CBN to build its own capacity to supervise them effectively.
Agreeing that passing an examination will not make a bad manager good, another customer said: â€œThis test would certainly indicate who is who in the industry. Managers may not come with similar answers, as there are still some grey areas where there is no consensus. But such tests will show if the managers are, at least, in the right direction. Capacity building would then be critical for the managers, board members and also CBN supervisors.