By PROVIDENCE OBUH

Following the December 31, 2012 deadline given for the recapitalisaion of all Microfinance Banks (MFBs) operating in the country, operators have expressed  hope of a vibrant sub-sector in 2013.

Meanwhile the sub-sector has affirmed that subsequent to its recapitalization, it is charting means of disbursing its outstanding funds that have awaited the categorization exercise.

The recapitalization is a revised policy framework of the Central Bank of Nigeria (CBN) directing MFBs to increase their capital base to position them to Unit, State or National   category.

The Unit category will have a minimum paid-up capital of N20 million, paid-up capital base of N100 million for State category and a paid-up capital of N2 billion  capital base for the National category.

To this end, the Chairman, National Association of Microfinance Banks (NAMB) South West zone Mr. Olufemi Babajide said that the recapitalisation would enhance efficiency in terms of fund disbursement to farmers and low income earners, especially the active poor in the society.

The Central Bank of Nigeria head office in Abuja.

“The sub-sector is expected to start disbursing the numerous funds approved for on lending by the CBN,” Babajide explained, saying, “The categorization would help know who is who in the sub-sector and also determine the MFBs that qualify in the disbursement of the funds.”

It would be recalled that the CBN  launched the N220, billion  Micro Small and Medium Enterprises Development Fund (MSMEDF) and also set up N600 billion in a special purpose vehicle under the Nigeria Incentive-Based Risk-Sharing System for Agricultural Lending (NIRSAL) initiative to be assessed by farmers.

“Our challenge has always been liquidity but  with the funds coming from the CBN, we expect a very vibrant sub-sector in 2013, and we expect a 10 per cent growth in 2013 because of all the opportunity that will come our way.

I see us jumping, leaping, and I think we should be able to increase our reach from the present volume to something significant,” he said.

Accordingly, an official of the CBN who spoke to Financial Vanguard on anonymity said that the recapitalization concept has been misunderstood by the public, explaining that 20 million recapitalisation has always been there for all MFBs.

The source also said that MFBs who can not meet with N100 million under state categorization remain in the Unit category.

“The Unit MFBs can continue, if they do not have N100 million. Even if they have N80 million, they should go ahead to close down their branches or else they will be penalized.”