The Central Bank of Nigeria (CBN) yesterday set a three-year timeline for all categories of Microfinance Banks (MfBs) to recapitalise. The apex bank directed all categories of MfBs to complete their recapitalisation process on or before April 2021.
In a circular to all MfBs signed by CBN Director, Financial Policy and Regulation, Kelvin Amugo, the CBN also approved N5 billion minimum capital base for National Microfinance Banks. The minimum capital bases for State Microfinance banks were set at N1 billion; Tier 1 Unit Microfinance Bank, N200 million and Tier 2 Unit Microfinance bank N50 million.
Amugo said the apex bank revised the categories of Microfinance banks with a view to ensuring continued operations of Microfinance banks in the rural, unbanked and underbanked areas of the economy.
“Accordingly, Unit Microfinance Banks shall comprise of two tiers: Tier 1 Unit Microfinance bank, which shall operate in the urban and high-density-banked areas of the society; and tier 2 Unit Microfinance Bank, which shall operate only in the rural, unbanked or underbanked areas,” Amugo said.
He explained that to aid the process of recapitalization, all Tier 1 Unit Microfinance banks shall meet a N100 million capital threshold by April 2020 and N200 million by 2021; Tier 2 Unit Microfinance Banks shall meet a N35 million capital threshold by April 2020 and N50 million by April 2021; State Microfinance bank shall increase its capital to N500 million by April 2020 and N1 billion by April 2021 while National Microfinance Bank shall hold a capital of N3.5 billion by April 2020 and N5 billion by April 2021.
The CBN had earlier announced its plans to set up National Microfinance Bank backed by the Nigeria Postal Services (NIPOST) to enable it drive financial inclusion to the people living in rural communities.
It is also hoped that the bank would help to fill the vacuum in extending credit to small and medium enterprises as private Microfinance banks had failed to fulfill the promise of financial intermediation to lower segments of the society. The Nation
Pix: CBN Governor, Godwin Emefiele
