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Microfinance Banks Kick Against New Minimum Capital



The National Association of Microfinance Banks (NAMB) has kicked against the new minimum paid-up capital requirement by the Central Bank of Nigeria, CBN for microfinance banks saying it is capable of destroying the industry.

The National President, NAMB, Mr. Rogers Augustine Nwoke made the condemnation over the weekend at the 2019 annual microfinance banking conference held in Abuja.

Speaking at the conference, with the theme “sustainable and innovative digital finance in MSME development in Nigeria: The microfinance bank option”; Nwoke said “let us have a gradual growth in capital. You don’t move from N20m to N200m. the fact that commercial banks did 1000 percent increase doesn’t mean you should do the same with microfinance banks. So our discomfort is from the quantum leap. We should move gradually on a sustainable basis.”

Also speaking at the event, Sen. Abdullahi Adamu, who also owns a microfinance bank condemned the new capital requirement, noting that “I do not know the rationale for this new policy but I have no doubt that it would be inimical to the industry.”

He said the consequences of killing the microfinance banks will be grave for Nigeria’s economy adding that the MFBs should be encouraged and helped and not killed. He called for the outright abrogation of the policy in order to save the banks and the MSMEs sector.

The NAMB also kicked against the CBN and the Bankers’ Committee plan to make available funds to NIRSAL Microfinance banks to lend at five percent intense rate.

The NAMB President called on the CBN to extend same privileges it is according the NMFB to other MFBs as anything short of that will be discriminatory.

“We are happy that a big microfinance bank has entered the system, the one with the right financial strength supported by the Bankers’ Committee. We are also happy when we heard that the CBN is making efforts to provide funds to NIRSAL Microfinance Bank so they can deliver credit facilities at five percent per annum. That is exciting. However, we are saying it should be available to all micro finance banks that meet the criteria. No one should be seeing as playing at a more comfortable ground than the others” he said.

The NMFB is a brainchild of the Bankers’ Committee, the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) and the Nigerian Postal Service with support from the CBN. It has a capital base of N5 billion.




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