CBN extends recapitalisation deadline for MfBs till Dec 31
The Central Bank of Nigeria (CBN) has extended the recapitalisation deadline for microfinance banks (MfBs) to December 31, 2013. The deadline expired in December, last year.
Director, Corporate Communication, CBN, Mr Ugochukwu Okoroafor, told our correspondent that the deadline was extended following the MfBs' plea.
Under the proposed recapitalisation, MfBs are required to have N20 million for a unit license, N100 million, state license, and N200 million, national license.
Following the deadline's expiration last year, the banks asked for more time to shop for funds to recapitalise.
Okoroafor said: 'We have agreed to shift the deadline given to the banks to raise their capital. I do not want to give a date that is not correct. I need to check the new date from the office next week. But the new date is this year.'
The National Association of Microfinance Banks (NAMBs) has said it is awaiting CBN's formal announcement of the extension. The association's Chairman, Southwest Region, Mr Olufemi Babajide, said MfBs had received feelers that the deadline has been extended till December 31, 2013.
He said: 'Though the apex bank has not issued a circular to that effect, there is hope that the banks would get another date to recapitalise their businesses. Having realised that the banks have failed to meet the 2012 deadline, we made some recommendations to CBN.
'Top on the list is the issue of extension of the capital base deadline. Other issues are funding of the bad debts of the banks, extension of branches, and how to ensure smooth running of the banks. We have presented our positions, they promised to review them and get back to us.'
The formal announcement of the extension, he said, was not something the CBN could do hastily, stressing that the regulator believe in due process. He said: 'We strongly believe that the shift in recapitalisation deadline would be formalised soon. He added that discussions are on-going on the release of the N220 billion Microfinance Development Fund and the N75 billion approved for the take-off of the National Incentive-Based Risk Sharing in Agricultural Lending (NIRSAL).
Babajide said the government was interested in developing the agricultural sector, stressing that the fund would be given to the banks for distribution to farmers in the 36 states, including the Federal Capital Territory (FCT).
He said CBN has not told the banks when the funds would be released to the beneficiaries, but MfBs are trying to make the funds available to the operators as soon as the cash is available.
The Managing Director, LAPO Microfinance Bank Limited, Mr Godwin Ehigiamusoe, said though many banks have the capacity to raise the requisite capital, there is the need to extend the deadline in the interest of the sub-sector.
Ehigiamouse said operators were optimistic that the deadline would be extended, advising banks to try and make funds available to the operators to enable them to develop the economy.
He said the CBN's reforms have engendered growth in the industry, arguing that banks are now better placed to conduct transactions hitherto beyond their reach.
He urged operators to work harder by trying to meet standards stipulated by the CBN. The Nation