BY PROVIDENCE OBUH
National Association of Microfinance Banks, NAMB South West Zone has warned the Central Bank of Nigeria, CBN on the imminent danger of the revised microfinance policy framework.
Chairman of the Zone, Mr. Olufemi Babajide raised the alarm in a statement entitled dialogue on capitalisation and categorisation of MFBs in Lagos.
Babajide said, “The deadline of December 31st, 2012 is not feasible. We want the deadline to be extended till December 31st, 2014. If implemented, it will erode the gains we are already recording in the sub-sector, especially the stability we are experiencing.
“MFBs are apprehensive because of the pronouncement of the Other Financial Supervision Institution Department (OFSID) . They are not sending their staff for the Certification programme which the CBN is spending money on. They are not paying their annual dues, staff members are afraid of Job loss. State Governments are beginning to withdraw their patronage of MFBs. Depositors are afraid.
“Our regular capacity building cannot be organized because of the fear of another Tsunami that may hit the subsector. Under the Nigeria Incentive- Based Risk Sharing-System for Agricultural Lending (NIRSAL) programme, which is an initiative of the CBN, farmers have already been paired with the branches of MFBs. If such branches are closed, it will be a setback for the programme.
“This will compound the low productivity in the Agricultural Sector. Nigerians will surely go hungry. The Rural Agricultural Programme has already started with the branches of MFBs. If they are closed down, colossal losses will be recorded by Rural Farmers Finance Institution of Nigeria (RUFFIN), Farmers, Cooperative societies, the host communities and MFBs. Other initiatives such as: The United Nation Development Programme (UNDP) Solar power, Oando Gas that the branches of MFBs have signed on will automatically collapse.”
Meanwhile, the Revised Microfinance Policy Regulatory and Supervisory Framework states that “all MFBs that have elected to remain Unit MFBs, as indicated in the compliance plans earlier submitted to the CBN are required to close any existing branches/cash centres.
“All customer interaction centres’, ‘meeting points’ and customer service centres or similar outlets, once located outside the registered business premises of a Unit MFB shall be regarded as unauthorized/unapproved branches/cash centres. All previous approvals for such outlets for Unit MFBS have become null and void from the date of approval of the Revised Policy Framework by the Board of Directors of the CBN.”
The CNB also stipulates that penalty for operating a branch/cash centre without prior approval of the CBN as stipulated In Section 13.1(b) of the Revised Guidelines for MFBS shall attract a fine of N250,000 per branch for a Unit MFB, N500,000 per
Branch for a State MFB and N1, 000,000 per branch for a National MFB and such unapproved branched/cash centres closed within 30 days.
“Failure to close an unapproved branch or cash centre shall attract a fine of N5, 000 for each day of default, irrespective of the category of MFB. Moreover, failure to comply with any directive issued by the CBN, as stipulated in Section 19(i) of the Revised Guidelines for MFBS, Is a ground for revocation of licence.”
It would be recalled that the crisis that rocked the subsector in 2008 led to the revocation of operating licences of about 224 MFBs in the country.