Microfinance Policy, Regulatory and Supervisory Framework for Nigeria

This document outlines the microfinance policy of Nigeria. It also presents the regulatory and supervisory framework for microfinance operations in Nigeria.

The document discusses:

• An overview of the microfinance activity in Nigeria;
• Justification for establishment of microfinance banks;
• The microfinance policy of Nigeria;
• Goals and objectives of microfinance banks;
• Policy measures and instruments in establishment of the framework for microfinance banks;
• Framework for supervision of microfinance banks;
• Regulatory incentives for microfinance institutions;
• Roles and responsibilities of different stakeholders.

The document concludes that:

• There exists a huge untapped potential for financial intermediation at the micro and rural levels of the Nigerian economy.
• Microfinance banks being established in line with this policy framework should be adequately capitalized, appropriately regulated and supervised to address the need of financing at the micro levels of the economy,
• Existing community banks should transform to microfinance banks within 24 months of approval of this policy, by increasing their shareholders' funds unimpaired by losses, to a minimum of N 20.0 million,
• Central Bank of Nigeria should supervise and regulate the microfinance banks.