Originally published: January 7, 2008
Source: Vanguard, Nigeria
On January 1, 2008, the Central Bank of Nigeria (CBN) put into effect its new National Microfinance Policy, which aims to enable microfinance institutions (MFIs) to act as new sources of development finance in the country. The new policy is also part of the reforms designed to rid the Nigerian financial system of distress and ensure that operators are better positioned to perform their primary role of financial intermediation.
Under the new microfinance policy, existing community banks must increase their capital base from N5 million (US$42,000) to N20 million (US$170,000) in order to qualify as MFIs, and were given until December 31, 2007 to meet the requirement. Close to 145 community banks may lose their licenses under this new regulation.
Sam Oni, CBN Director of Other Financial Institutions Department, said that the principal objective of the microfinance policy is to create microfinance banks that are financially sound, stable, self-sustaining and integral to their communities with the potential to attract more resources and expand services to their customers.
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