Central bank of Nigeria revokes license of 9 microfinance banks

Oct 24, 2018
The Central Bank of Nigeria (CBN) has again revoked the operating licenses of nine (9) microfinance banks in Niger State, the National Association of Microfinance Banks (MFBs).
 
The North Central Secretary of the association, Tsado Daniel, who made this known while speaking at the commissioning of the Federal Polytechnic Bida Microfinance Bank, said the banks were part of the 34 MFBs in the state before the CBN’s action.
 
Although, Daniel did not mention the names of the affected MFBs, he simply said “these micro-finance banks lost their licences because they fell short during the regulation exercise carried out by the CBN.’’
 
According to him, the non-adherence to corporate governance contributed to the collapse of the banks, urging the management and staff members of the new and existing banks “to adhere strictly to the rule of the game.”
 
“Banks do not die, people kill them; please do not kill the Federal Polytechnic Bida Microfinance Bank,” Daniel counselled.
 
The CBN had recently declared its plans to revoke operating licenses of 182 financial institutions operating in the country.
 
The declaration came about a week after it revoked Skye Bank’s license over failure of its shareholders to recapitalise the bank.
 
CBN had said the 182 financial institutions in its watchlist, including 154 MFBs, cut across different states of the country.
 
Reacting, a representative of CBN in Minna, Hajia Hajara Mohammed, pointed out that insider abuse was a huge factor that contributed to the failure of MFBs across the country.
 
Mohammed urged beneficiaries of loan facilities from banks to stop diverting the money to marriage ceremonies or other unprofitable ventures.
 
Speaking earlier, the Rector of the polytechnic, Dr. Abubakar Dzukogi, said the MFB will kick off its operations with a capital base of N20 million with the aim of increasing it to N50 million by 2019
 
Dzukogi, who doubles as the Chairman, Board of Directors of the Federal Polytechnic Microfinance Bank, added that the effort would ensure students and staff perform banking transactions in a seamless manner, which according to him, is in line with the cashless policy of the CBN.
 
 
Source: The Ripples

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