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CBN raises capital requirements for microfinance banks by 900%

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5 years ago

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The Central Bank of Nigeria has increased the capital requirements for microfinance banks in the country in a bid to tackle the challenge of inadequate capital base in the sub-sector.

The CBN announced the upward review of the minimum capital requirement in a circular dated October 22, 2018 to all microfinance banks in the country.

The minimum capital requirement for unit and state microfinance banks was raised by 900 per cent each to N200m and N1bn, respectively from N20m and N100m, while that of national microfinance banks increased by 150 per cent to N5bn from N2bn.

According to the circular, the new minimum capital requirement takes immediate effect for new applications, while existing microfinance banks shall be required to fully comply with effect from April 1, 2020.

The Director, Financial Policy and Regulation Department, CBN, Mr Kevin Amugo, said the apex bank reviewed the minimum capital requirement in exercise of the powers conferred on it by the Banks and Other Financial Institutions Act and in furtherance of its mandate to promote a sound financial system in the country.

He noted that given the role of microfinance banks in economic growth and development, the Microfinance Policy, Regulatory and Supervisory Framework was introduced on December 15, 2005 and revised in 2011.

Amugo stated that the key focus of the policy was, among others, to increase financial inclusion rate in the country, improve access to financial services for the active rural poor, and pursue poverty eradication.

According to him, the microfinance banking sub-sector, in pursuit of the above objectives, has been contending with such challenges as inadequate capital base, weak corporate governance, ineffective risk management practices, dearth of requisite capacity and mission drift.

He said, “The CBN has reviewed the state of health of the sub-sector and is of the view that microfinance banks, as presently constituted, would be unable to meet the critical targets set out in the Microfinance Policy, hence the need for specific reforms to strengthen the sub-sector and reposition microfinance banks towards improved performance.

“To meet these requirements, existing microfinance banks are expected to explore the possibility of mergers and acquisitions and/or direct injection of funds. The Revised Regulatory and Supervisory Guidelines for Microfinance Banks, Code of Corporate Governance for Microfinance Banks and sector-specific Prudential Guidelines for Microfinance Banks would be issued in due course.”

According to the circular, institutions that meet the capital requirements as well as demonstrate the existence of strong corporate governance in their operations will be allowed to open account at the CBN office within their state of operation.

Amugo said such institutions would also be channels for micro funding activities of the CBN and the Development Bank of Nigeria.

Source: Punch

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Finance

Nigerian Senate Confirms Appointment Of CBN Governor Nominee Yemi Cardoso, And Four Deputies

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1 week ago

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September 27, 2023

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The Nigerian Senate has confirmed the appointment of Yemi Cardoso as the Central Bank of Nigeria (CBN) governor and four others as deputy governors of the apex bank.

Their appointment was confirmed after their screening by the upper legislative bodytoday September 26. The deputy governors who were confirmed are Emem Nnana Usoro, Muhammad Sani Abdullahi Dattijo, Philip Ikeazor, and Bala Bello.

“The nomination of Olayemi Cardoso is hereby confirmed as governor of the Central Bank of Nigeria (CBN),” Senate President Godswill Akpabio said

Before their confirmation, the nominees had answered questions on matters related to economic and other policies. During the screening, Cardoso promised to embrace compliance, assuring that under his leadership, the apex bank would remain apolitical.

“I believe that the Central Bank under our watch will have no choice but to embrace a culture of compliance. We will not wait for oversight to come and tell us what to do. We will ensure that by the time the system is passing through us, we catch it and we deal with it,” said Cardoso who promised zero tolerance for abuse of compliance. That is a cultural shift, a change in mindset, but we will make sure it happens,” Cardoso said

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Finance

CBN confirms Emefiele’s Resignation As Cardoso Assumes Office

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2 weeks ago

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September 22, 2023

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Olayemi Michael Cardoso who was recently nominated by President Bola Ahmed Tinubu, as the acting Governor of the Central Bank of Nigeria CBN on Friday, September 22, 2023, pending his confirmation by the Senate. A statement released by the apex bank says Cardoso’s assumption follows the resignation of the immediate past governor of the bank, Godwin Emefiele,

The statement added that the Deputy-Governors-Designate of the bank have also assumed duty, in acting capacities, sequel to the formal resignation of Mr. Folashodun Shonubi, Mrs. Aishah Ahmad, Mr. Edward Lametek Adamu, and Dr. Kingsley Obiora as Deputy Governors of the CBN.

‘’Dr. Cardoso and his colleagues subscribed to the relevant oaths of office at a brief ceremony held at the Bank’s Head Office in Abuja, on Friday, September 2023, and have since settled down to the task of administering monetary and financial sector policies of the FederalGovernment.”

An Economic and Development Policy Advisor, Financial Sector Leader, former Chairman Citi Nigeria and Commissioner for Economic Planning and Budget in Lagos, Cardoso brings over three decades of managerial experience on board. He is an alumnus of Aston University, Birmingham, United Kingdom, where he studied managerial and administrative studies. He also holds a Master’s degree in Public Administration from the Harvard Kennedy School, United States of America.

It will be recalled that Dr. Cardoso and his colleagues were appointed to their respective positions at the Bank on September 15, 2023, subject to their confirmation by the Senate.

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Finance

CBN Suspended Governor, Godwin Emefiele Opts For Plea Bargain In Court Case

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1 month ago

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August 24, 2023

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The suspended Governor of Central Bank of Nigeria (CBN), Godwin Emefiele, has reportedly opted for plea bargain.

The Nation reports that as part of the out-of-court settlement terms, Emefiele will forfeit any illicit funds and questionable assets traced to him. It is however not certain if any illicit fund has been linked to him.

The report adds that Emefiele will also step aside as the CBN governor to enable the government to appoint a substantive holder. It was also gathered that Emefiele and his relations will withdraw all matters in court.

On Wednesday, August 23, an Abuja Court struck out a suit filed by the embattled CBN governor challenging his detention. His siblings – George and Okanta – withdrew the two suits they filed against the Department of State Service (DSS) and the Attorney-General of the Federation (AGF).

Some highly-placed Nigerians were said to have interceded for Emefiele to make government accept the plea bargain offer. The turn of event on his trial was said to have both “legal and political tones to avoid anything which may have negative impacts on the economic agenda of the administration of President Bola Ahmed Tinubu.”

Emefiele is standing trial for alleged violation of the procurement law to the tune of N6.9 billion.

A source was quoted as saying Emefiele was worried about the likely dragging of his trial for years, as and members his family weighed all options and settled for plea bargain. They added that the Federal Government’s legal team and Emefiele’s lawyers were perfecting the terms of settlement.

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