Nigeria’s microfinance banks‘ total assets increased to N1.35 trillion by the end of September 2021, up from N856.3 billion in September 2020.
This was contained in a quarterly bulletin obtained by our correspondent from the Central Bank of Nigeria on ‘Microfinance Banks’ Account Assets.’
Furthermore, data obtained from the CBN on the ‘List of Licensed Microfinance Banks’ revealed that the number of microfinance banks increased from 876 on June 30, 2021 to 882 on December 31, 2021.
The CBN had ordered the MfBs to shore up their capital in October 2018.
READ ALSO: Microfinance Banks Lose Over N5b To Fraud
The CBN stated in a circular to the MfBs that the banks were facing challenges such as insufficient capital, weak corporate governance, ineffective risk management practices, a lack of required capacity, and mission drift.
It urged them to look into mergers and acquisitions as well as direct funding injections.
While the new capital requirement went into effect for new MfB license applications, existing banks were given until April 2020 to meet the new requirement.
However, in April 2020, the CBN revised the deadline for compliance with the minimum capital requirements for MfBs in light of the impact of the COVID-19 pandemic on economic activities.
This was communicated by the banking regulator in a circular with the reference number FPR/DlR/GEN/ClR/07/054 titled ‘Re: Review of Minimum Capital Requirements for Nigerian microfinance institutions’
“The Central Bank of Nigeria has extended the deadlines for compliance with the revised minimum capital requirements for all categories of MFBs by one year,” according to the circular.
“MFBs operating in rural, unbanked, and underbanked areas (Tier two) must meet the N35m capital threshold by April 2021 and the N50m capital threshold by April 2022.”
MFBs operating in urban and high-density banked areas (Tier one) are expected to reach the NI00 million capital threshold by April 2021 and the N200 million capital threshold by April 2022.
“State MFBs must raise their capital to N500 million by April 2021 and N1 billion by April 2022.”
“National MFBs are expected to meet a minimum capital requirement of N3.5 billion by April 2021, and N5 billion by April 2022.”
