By KAYODE TOKEDE, Lagos
The Central Bank of Nigeria (CBN) has granted operational license to two non-interest microfinance banks (NIMBs) with the third awaiting final approval.
According to CBN, the two granted NIMBs are Tijarah Microfinance Bank in Bauchi State and I-Care Microfinance Bank Ltd in Kano State.
“The third is in Ibadan and has not been granted approval by CBN,” a source in CBN explained to LEADERSHIP. The nation’s first Shariah compliance microfinance bank, Tijarah MFB Ltd. was granted a full operating licence as a non-interest (Islamic) state microfinance bank by the CBN in 2014, and commenced operations on October, the same year.
Commenting, the acting president, National Association of Microfinance Banks (NAMB), Mr Nasiru Baba, said the shariah- compliant microfinance bank would drive the CBN’s financial inclusion across the country.
“The Non-Interest Microfinance Bank will enhance CBN’s financial inclusion services and further enhance growth in small and medium enterprises (SMEs).
“Most of bank customers that are not considered with conventional banking will be taken care under the non-interest micro finance bank. Because of their belief, some customers have refused to transact businesses with conventional bank,” he explained.
When asked about access to credit, he said “those operating at non-interest microfinance bank are conversant with the system. The operators know how to gain access to credit and lend to those who applied for it. They give out products that are based on religious sentiments,” he added.
The second vice president of NAMB, Mr Gold Kola, during the weekend said CBN was providing a level playing field between the conventional and the non-interest microfinance banks. He noted that the non-interest microfinance banks has taken care Shariah and it was expected to boost the nation’s economy.
According to him, the non- interest microfinance bank would create varieties in which customers can decide where to operate. He noted that no microfinance bank can survive without collecting interest expect it is being funded by a state government or an international agency.
“Microfinance bank cannot operate without considering the cost of funds unless there are grants allocated to them. Those grants must always come with zero interest rate.
Director, financial policy and regulation department, CBN,Mr Kevin Amugo, had explained that the mandate of introducing non-interest (Islamic) microfinance banks in Nigeria was to promote a sound financial system.
He explained in a signed circular that a guidelines was developed to provide a level playing field between the conventional and the non-interest microfinance banks and to address issues underpinning the operation of non-interest financial institutions (NIFIs).