Operators of microfinance banks are making efforts to adopt the International Financial Reporting Standard (IFRS) as ordered by Central Bank of Nigeria (CBN).
Mr Olufemi Babajide, the Chairman of Lagos Chapter of National Association of Micro finance Banks (NAMB), disclosed this in an interview with the News Agency of Nigeria (NAN) on Monday in Lagos.
NAN reports that the regulatory agencies directed partial adoption of IFRS by companies in 2010, targeting full adoption by January of 2012.
The adoption is in a bid to integrate the microfinance banking system into the global best practices in financial reporting and disclosure.
Babajide said that the motive was to enhance market discipline and preparation of accounting statements that would be internationally compatible.
He said that the apex bank had given microfinance banks up till March 2013 to fully comply with the standard and that the association would begin to sensitise operators from April.
The chairman said that many operators initially thought that the adoption of IFRS was meant for only quoted companies.
``But now, microfinance banks have been directed to comply by 2013 as no sector will be exempted,’’ he said.
Babajide said that IFRS would be a major change for the banks because it would lead to major changes in internal systems, business processes, performance management, and external communications.
``Until recently, that common accounting language has been a missing link.
``Even the traders with international partners, lawmakers and regulators are working to provide a single set of high quality and global accounting principles,’’ he said.