By PROVIDENCE OBUH

The Central Bank of Nigeria (CBN) has said that there would be a constant review of the prescribed minimum capital requirement for Microfinance Banks (MfBs) in the country.

The new microfinance policy framework serves as a platform for the operational and financial sustainability for microfinance delivery.

The framework recognises three categories of microfinance banks and stipulates minimum capital requirements for each category; “MfB is authorised to operate in one location, with a minimum paid up capital of N20 million and is prohibited from having branches/cash centres or any other location under the guise of customer meeting points or interaction centres; states’ MfBs are to operate in one state or the FCT with a minimum paid up capital of N100 million and allowed to open branches within the same state or the FCT subject to CBN approval, while the National MfB is authorised to operate in more than one state, including the FCT with a paid up capital of N2 billion and allowed to have branches in any part of the country, subject to CBN approval.

Deputy Director, Other Financial Institutions Supervision Department (OFISD), Mrs. Adetutu Ogunnaike, made these remarks in her paper, titled; The Regulatory and Supervisory Framework for the Operations of Microfinance Banks in Nigeria.

CBN Gov, Sanusi Lamido

Ogunnaike said; “The prescribed minimum capital requirement for each category of MfB may be reviewed from time to time by the CBN.  The revised microfinance policy framework provides that MFBs shall be required to be adequately capitalised, better managed, run on low cost structure and be operated in a safe and sound manner. The CBN will continue to monitor and secure a conducive environment for the conduct of microfinance and business activities in Nigeria.”

She noted that MfBs, who are willing to join the sub-sector are required to meet the stipulated minimum requirements for each category, while existing ones would be availed from time to time to raise additional capital where necessary, or to restructure their operations to conform to the revised policy framework.