Promoters of some microfinance banks whose licences were recently revoked by the Central Bank of Nigeria (CBN) want their customers to hasten the process of verification to enable their being paid on time.
Some of them who spoke to our reporter said the payment of insured deposits to their customers would depend on how fast the verification is completed. The Nigeria Deposit Insurance Corporation (NDIC), the nation’s deposit insurer, would only pay affected customers who have been verified.
Ayo Akinleyure, chairman of Allover Microfinance Bank located at Agege, Lagos State, said depositors need to take the issue of account verification important, to hasten the receipt of their funds. “Bring your papers for verification. Once it is verified, payment can be made,” he said.
A staff of Allstar Microfinance Bank located at Ijeshatedo, also in Lagos, said the bank has started its verification exercise. According to him, the major requirements include customers’ bank documents, passbook, cheque books, identity cards, and all other documents that would be required to verify the authenticity of the customers.
“I do not think they are paying this week, but the process right now is that customers should come to the bank and have their accounts verified. We have to be certain that you have an account with the bank,” he added.
Last week, the spokesperson of the NDIC, Hadi Birchi, said the payment of funds to depositors of the affected microfinance banks would begin on Monday, 6th of December.
“We would begin payment on Monday. That is all I can say for now,” he said, even though he didn’t specify the procedure for the payment.
The Central Bank of Nigeria in October, revoked the operating licences of 224 microfinance banks that were found to be ‘terminally distressed’ and ‘technically insolvent’ and/or had closed shop for at least six months, after a target examination was conducted on 820 micro finance banks across the country.
Shortly after that, it stated that it had granted provisional approval for new licences to about 121 of the 224 microfinance banks whose licences were earlier revoked, subject to the fulfilment of some specific requirements within three months.
According to the Central Bank, “Those granted these provisional approvals are those that had made fresh injection of capital and made significant loan recovery, as confirmed by a recent capital verification exercise.”
Prevention, instead of cure
The Central Bank has stated that it is putting in place other measures to ensure that microfinance banks in Nigeria live up to the overriding objectives of fostering financial inclusion, fighting poverty, and empowering low-income and vulnerable groups.
“Microfinance banking is a regulated activity and only those that are prepared to play by the rules and comply with the appraisal guidelines, prudential requirements, and extant laws will be allowed to remain in the field,” Mohammed Abdullahi, the spokesperson of the Central Bank said.
According to Mr. Abdullahi, no depositor would lose their money in the banks that were closed down. He stated that even though the NDIC guarantees a payment of not more than N100, 000 to each depositor, as provided by its insurance scheme, the Central Bank would assist the banks to aggressively recover their portfolio of nonperforming loan exposure amounting to about N20 billion, which may also be used to offset their debts to customers.
It is expected that the Central Bank would progress on its promise to review the microfinance policy framework, the introduction of a new operational template to benchmark microfinance banking, capacity building to develop a critical mass of knowledge and skill, human resources, as well as examining the possibility of introducing a Micro, Small and Medium Enterprise (MSME) fund to catalyse a sustainable development of the microfinance space.
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