- Nigeria's central bank (CBN) raises the minimum capital base of microfinance banks (MFBs) across the country.
Nigeria's central bank (CBN) has raised the minimum capital base of microfinance banks (MFBs) across the country, informing them to recapitalise by April 2020.
Kevin Amugo, CBN's Director, Financial Policy and Regulation Department, made this known in a circular issued on October 22, 2018.
According to the circular, the apex bank increased the minimum capital base of National MFBs to N5 billion from N2 million. State's microfinance capital requirement increased to N1 billion from N100 million and Unit MFBs from N20 million to N200 million.
The CBN explained that the revision became inevitable as the sector had been contending with challenges such as inadequate capital base, weak corporate governance, ineffective risk management practices, among others.
Last month, the central bank notified 182 other financial institutions of its intentions to revoke their operating licences.
The banking regulator listed 154 microfinance banks, 6 mortgage banks and 22 finance companies among the troubled institutions.
It also stated that eight finance companies voluntary liquidated while 13 failed to recapitalise and one became insolvent.
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