The Central Bank of Nigeria (CBN) has reviewed the deadline for minimum capital requirements for micro finance banks (MFBs) in the country, extending it to 2021-2022 financial years.
In a circular to all MFBs on Wednesday signed by the Director Financial Policy and Regulatory Department, Kevin Amugo, the apex bank stated that the latest policy directive was informed by the impact of the COVID-19 pandemic on economic activities.
Specifically, the CBN directed that MFBs operating in rural, unbanked and underbanked areas (Tier 2) shall meet the N35m capital threshold by April 2021 and N50m by April 2022; while MFBs operating in urban high density areas (Tier 1) are expected to meet the N100m capital threshold by April 2021 and N200m by April 2022.
Also, the apex bank directed that State MFBs shall increase their capital base to N500 million by April 2021 and N1billion by April 2020; and that National MFBs are required to meet the minimum capital of N3.5 billion by April 2021 and N5 billion by April 2022.
It advised all operators to be guided accordingly.
It would be recalled that the banking sector regulatory institution had early March this year issued the revised the 2012 supervisory and regulatory guidelines for the MFBs to support the development and sustainability of the sub-sector.
In the circular it stated that the measure was taken as part of the “the need to reposition and strengthen MFB towards improved performance had become apparent as revealed from the report of a recent review of the subsector.
“Accordingly, the 2012 guidelines have been reviewed to strengthen and complement other on-going reform in the MFB sector. An exposure draft of the review guidelines is hereby issued for comments and observations”, the apex bank added.
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