Who regulates microfinance banks in Nigeria?

the Central Bank of Nigeria
These supervisory and regulatory guidelines are issued by the Central Bank of Nigeria [hereinafter referred to as CBN or the Bank] in exercise of the powers conferred on it by the provisions of Section 28 subsection (1) (b) of the CBN Act 24 of 1991 [as amended] and in pursuance of the provisions of Sections 56-60A of …

What are the prudential requirement of MFBS in Nigeria?

An MFB is required to maintain a minimum of 20 per cent of its deposit liabilities in liquid assets. An MFB shall not invest more than 20 per cent of its shareholders’ funds unimpaired by losses in fixed assets.

What are the limitations of microfinance?

Here are Challenges faced by Microfinance Institutions

• Over-Indebtedness.
• Higher Interest Rates in Comparison to Mainstream Banks.
• Widespread Dependence on Indian Banking System.
• Inadequate Investment Validation.
• Lack of Enough Awareness of Financial Services in the Economy.
• Regulatory Issues.
• Choice of Appropriate Model.

What is the capital base for microfinance banks in Nigeria?

The minimum capital requirement for this category of MFB is N200,000,000 (Two Hundred Million Naira). A state microfinance bank is one having a single state authorization or that of the Federal Capital Territory (FCT).

What are the guidelines for microfinance banks in Nigeria?

When implemented in April 2020, the draft guidelines will amend the Revised Regulatory and Supervisory Guidelines for Microfinance Banks in Nigeria issued in 2012 The proposed changes are as follows: Categories of MFBs: The draft guidelines restructure the categories of MFBs by introducing two tiers of Unit MFBs: Tier 1 and Tier 2.

What are guidelines for regulation and supervision of MFBs in Nigeria?

In its continued bid to support the development and sustainability of Microfinance Banks (MFBs), the Central Bank of Nigeria (CBN) has issued an exposure draft of the Guidelines for the Regulation and Supervision of Microfinance Banks in Nigeria, 2020 (“the draft guidelines”).

When did the CBN introduce the microfinance policy?

INTRODUCTION 1.1 In December 2005, the Central Bank of Nigeria (CBN) introduced a Microfinance Policy Framework to enhance the access of micro- entrepreneurs and low income households to financial services required to expand and modernize their operations in order tocontribute to rapid economic growth.

How is the government involved in microfinance banks?

Government Participation in MFB: The draft guideline introduces three models of government participation in MFBs: Fully Owned Government Microfinance Bank Model: This may be fully owned by a State or Local Government, which shall progressively divest its interest to private investors within a maximum period of five (5) years.