The Central Bank of Nigeria (CBN) yesterday issued the revised supervisory and regulatory guidelines for micro finance banks (MfBs).
The new rule requires that National MfB will now operate with N5 billion capital base by April 2021.
The CBN circular announcing the new guidelines stated that, “The need to reposition and strengthen MFB towards improved performance had become apparent as revealed from the report of a recent review of the sub-sector”.
Continuing, it said the 2012 guidelines have been reviewed to strengthen and complement other on-going reform in the MFB sector. An exposure draft of the review guidelines is hereby issued for comments and observations.
The CBN circular directed the MfB operators to stay within approved business, or pay a fine of N500,000 and forfeiture of the estimated profit from the engagement.
It stated that failure to obtain the CBN approval before going into any form of restructuring or reorganisation would attract a fine of N500,000 regardless of the category of the MfB.
The draft, however, maintained the required capital for the MFBs to operate.
Earlier on, the apex bank had stated that the Tier 2 unit microfinance banks must have a minimum capital of N50 million, while Tier 1 would maintain the N200 million minimum capital introduced for unit MfB banks in October 2018.
It stated that Tier 1 unit MfB banks must meet a N100 million capital threshold by April 2020 and N200 million by April 2021.
Tier 2 unit MfB, it added, must meet a N35 million capital threshold by April 2020 and N50 million by April 2021.
The CBN stated that state MfB must increase their capital to N500m by April 2020 and N1 billion by April 2021.
A national MfB must hold a capital of N3.5 billion by April 2020 and N5 billion by April 2021.
