Trending Story

CBN unveils new minimum capital base for microfinance banks 

186

 


April 1, 2020, has been set as deadline for microfinance banks in the country to meet the first stage of their new minimum capital base, the Central Bank of Nigeria (CBN) has announced.
This is contained in a draft guideline for the regulation and supervision of the microfinance banks posted on the CBN’s website.
The guideline for regulation and supervision of MFBs was last reviewed in 2013.

It reads: “The 2012 Guidelines have been reviewed to strengthen and complement other on-going reform in the MFB subsector.”

Under the new capital base structure, the CBN categorised MFBs into four, as against the three – Unit, State and National contained in the 2012 Guideline.

But with the new capital base which takes effect next month, MFBs would be categorised into Tier-1 Unit, Tier-2 Unit, State and National.

The CBN had in 2018 reviewed the capital base of MFBs raising that of Unit MFBs from N20 million to N50 million for Tier 2 and N200 million for Tier 1 MFBs. The two categories were expected to meet N35 million and N100 million capital base by the first day of next month.

Also, the capital base of state MFBs had been raised from N100 million to N1 billion by 2021 and they are expected to have N500 million capital base by April 1, 2020 while the National MFBs are expected to have N3.5 billion by next month and shore it up to N5 billion by April 2021 from a previous requirement of N2 billion.

The CBN Director, Financial Policy and Regulation, Mr Kevin Amugo, stressed that the need to reposition and strengthen MFBs towards improved performance going by the report of a recent review of the subsector.

The draft guideline stipulates that Tier 1 Unit MFBs, “shall operate in the banked and high-density areas, and is allowed to open not more than four branches outside the head office within five contiguous local governments areas, subject to the approval of the CBN.”

”Also, Tier-2 Unit MFB with rural authorisation shall operate only in the rural, unbanked or underbanked areas, and are allowed to open one branch outside the head office within the same local government area, subject to the approval of the CBN.

“State Microfinance Bank is authorized to operate in one State or the Federal Capital Territory (FCT). It is allowed to open branches within the same State or the FCT, subject to prior written approval of the CBN for each new branch or cash centre.”

Leave a comment

Related Articles

Dani Alves pays €1m bail, set to leave Spanish jail

Former Brazil and Barcelona star Dani Alves, convicted of rape in Spain,...

World TB Day: 70 percent of TB cases in Africa now being diagnosed and treated – WHO

The World Health Organization (WHO) has disclosed that about 70 percent of...

13th AAG: Tobi Amusan wins gold in women’s 100m hurdles

The Nigerian sprint star, Tobi Amusan, won gold in the women’s 100m...

FG approves N12.7bln for mass metering of army barracks nationwide

The Federal Government says it has released N12.7 billion to provide electricity...

Women’s Day: Tinubu felicitates women, vows to prioritise their welfare, rights

President Bola Tinubu has promised to prioritize the welfare of women, protect...

All African Games: Nigeria’s Flying Eagles start their campaign on a losing note

The Flying Eagles of Nigeria started their campaign in the men’s football...

EFCC sets up task force to combat dollarization of economy, mutilation of naira

The Economic and Financial Crimes Commission (EFCC) has announced the setting up...

How Bafarawa diverted N4.6bln from ex-NSA for prayers, election, acquire luxury vehicles

A startling revelation has been made about how a former governor of...

CBN redeploys 1,500 staff to Lagos

The Central Bank of Nigeria (CBN) says it has redeployed 1,500 staff...

AFCON: Pres. Tinubu says unimpressed with Super Eagles’ performance

President Bola Tinubu has expressed his displeasure over the performance of the...

I’ve not met a man kind enough to marry —Ini Edo

In a candid revelation, renowned actress, Ini Edo, has hinted about the...

Ogun CP visits shot Nollywood actor, Ijaduade, vows to punish trigger-happy cop

Nollywood actor and Director, Azeez Ijaduade, who was shot “accidentally” by a...

Breaking: Actor, Azeez Ijaduade, allegedly shot by policeman in Ogun

In a shocking incident that has sent shock waves to Yoruba section...

Fast and furious actor, Vin Diesel, accused of sexual assault

Vin Diesel, known for his role in the Fast & Furious Series,...

Anyone asking for money this festive season lacks conscience, fear God – Comedian AY

Amid Nigeria’s challenging economic downturn, renowned comedian, Ayo Makun, popularly known as...

Octogenarian actor, Dejumo Lewis, dies

Nollywood community was on Friday night thrown into grief as the news...

I’m lucky to have you as my wife, Lateef praises Mo Bimpe on 2nd wedding anniversary

Celebrating their second year wedding anniversary, Nollywood actor, Lateef Adedimeji, has expressed...

Frank Edoho faces backlash for controversial remarks on infidelity

Renowned media personality, Frank Edoho, is under fire after making contentious comments...

Youngi Duu: Portable admits to confrontation, claims disrespectful gesture triggered clash

MThe recent incident involving an alleged physical assault on the emerging music...

I’m grateful to God, fans, for successful career in 2023 – Davido

Nigerian music star, Davido, has taken to the social media to chronicle...