Central Bank of Nigeria (CBN) has set April 2022 deadline for tier-1 Microfinance Banks (MfBs) to achieve N200 million minimum capital base.
The announcement was contained in a CBN circular, signed by Director, Financial Policy and Regulations department, Kelvin Amugo. It said: “The Central Bank of Nigeria in consideration of the impact of the coronavirus (COVID-19) pandemic on economic activities, has revised the deadlines for compliance with the minimum capital requirements for Microfinance Banks (MFBS) in Nigeria.”
Consequently, the CBN has extended the deadline as follows: MFBs operating in rural, unbanked and underbanked areas (Tier 2) shall meet the N35 million capital threshold by April 2021 and N50 million by April 2022.
According to the apex bank, MFBs operating in urban and high density banked areas (Tier 1) are expected to meet the N100 million capital threshold by April 2021 and N200 million by April 2022 while State MFBs shall increase their capital to N500 million by April 2021 and N1 billion by April 2022.
In addition, National MFBs are expected to meet the minimum capital of N3.5 by April 2021 and N5 billion by April 2022.
The apex bank has also approved operating licences for 15 MfBs bringing the total number of operators to 913. The updated list of MfBs was contained in a CBN report, which indicated that before the current approvals, 898 operators had the apex bank’s recognition. All the operators were categorised by the regulator based on capital bases.
The CBN released the revised guideline for MfBs for repositioning and to strengthen the sub-sector to support development and growth in the Nigerian economy.
To this end, MfBs are permitted to engage in some types of deposits which include savings, time, target and demand deposits from individuals, groups, and associations, provision of credit to its customers as well as making available housing micro loans.
