By Agency Reporter

Tuesday, 8 Feb 2011

Stakeholders in microfinance banks have called on the Central Bank of Nigeria to grant additional six months to the 121 microfinance banks given provisional licences to operate.

The 121 microfinance banks are among the 224, whose licences were revoked in September 2010.

They were granted provisional licences to operate in October 2010 because they had injected fresh capital and made significant strides on loan recovery, as confirmed by the verification exercise conducted by the apex body.

The banks were given up till January 25, 2011 to recapitalise to a minimum of N20m or have their licences finally withdrawn

The banks were directed to ensure good corporate governance, strengthen their internal controls and close unapproved branches, cash centers, customers’ meeting points and adopt true microfinance model.

In separate interviews with the News Agency of Nigeria in Lagos on Monday, the stakeholders said that the affected banks needed more time, diligence and determination to regain investors’ confidence.

A former deputy governor of Plateau State, Mr. Jethro Akun, said that the three months were not adequate for the banks to recapitalise.

Akun, who is currently the Chairman of Eagle Microfinance Bank in Bokkos, Plateau State, said the poor state of the financial services sector had affected the liquidity position of the banks.

He said, “This can make it difficult for the banks involved to meet the three months deadline, so we are pleading with the CBN to give us additional six months to stabilise.”

He appealed to the Governor of CBN, Mallam Lamido Sanusi Lamido, to provide an “already made window” for the banks to access funds in time to meet the deadline.

According to him, one of the challenges facing operators in the sub-sector is their inability to dispose off estates in their possession.

The Chairman of National Association of Microfinance Banks in Lagos, Mr. Olufemi Babajide, said that the six months extension was necessary to enable the banks put things right.

According to Babajide, one of the challenges facing the sector is the inability of microfinance banks to dispose off estates built by the banks.

 

Source: Punch