The Central Bank of Nigeria has introduced a Tier-based
system for unit microfinance banks in the country.
The
apex bank also adjusted the time frame given to the different categories of
microfinance banks to recapitalise.
The
different categories are the unit, state and national operators.
In
a circular to all microfinance banks released on Monday on the ‘Review of
minimum capital requirement for microfinance banks in Nigeria,’ the CBN
reviewed a circular it had earlier issued to the microfinance banks on October
22, 2018.
The
CBN stated that the Tier 2 unit microfinance banks must have a minimum capital
of N50m, while Tier 1 would maintain the N200m minimum capital introduced for
unit microfinance banks in October 2018.
The
circular read, “The Central Bank of Nigeria revised the categories of
microfinance banks with a view to ensuring continued operations of microfinance
banks in the rural, unbanked and underbanked areas of the economy.
“The
unit microfinance banks shall comprise two Tiers: Tier 1 unit microfinance bank
which shall operate in the urban and high-density banked areas of the society;
and Tier 2 unit microfinance banks which shall operate only in the rural,
unbanked or underbanked areas.”
Following
the above, the CBN stated that the minimum capital requirement for the
categories of microfinance banks had been revised.
It
stated that Tier 1 unit microfinance banks must meet a N100m capital threshold
by April 2020 and N200m by April 2021. Tier
2 unit microfinance banks, it added, must meet a N35m capital threshold by
April 2020 and N50m by April 2021. The
CBN stated that state microfinance banks must increase their capital to N500m
by April 2020 and N1bn by April 2021.
A
national microfinance bank must hold a capital of N3.5bn by April 2020 and N5bn
by April 2021, it added.
Before
the apex bank commenced the recapitalisation of the microfinance institutions
in 2018, the minimum capital base for national microfinance banks was N2bn,
state microfinance banks was N100m, while the unit microfinance banks had a
minimum capital requirement of N20m.
culled from www.punchng.com
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