By Ifeanyi Onuba, Abuja

The Nigeria Deposit Insurance Corporation has concluded plans to pay N9.8bn to 731,000 depositors of microfinance banks, whose licences were revoked last September by the Central Bank of Nigeria.

The Head, Communication and Public Affairs Unit, NDIC, Mr. Hadi Birchi, who confirmed this to our correspondent in Abuja on Wednesday, said that the amount would be paid to depositors of 91 out of the 103 closed MFBs nationwide.

The CBN had while revoking their licences said that the MFBs abused corporate governance rules and were also involved in gross mismanagement, which was revealed by its examination of that sector of the economy.

But the NDIC, through a statement issued on Wednesday, said that while it was statutorily mandated to pay N4.9bn as insured deposits, the balance of N4.9bn uninsured deposits would be paid on realisation of the MFBs’ physical assets and the recovery of the debts they were being owed.

Out of the N4.9bn insured deposits, the statement said that the corporation had paid N1.492bn to about 45,000 depositors of the 91 closed MFBs since the commencement of the payment exercise on December 6, 2010.

In addition, it said that the second round payment of N2.177bn to the remaining 393,000 depositors of Integrated Microfinance Bank would commence on May 3, 2011.

It added that the corporation had earlier paid the insured sum of N529m to 21,000 depositors of Integrated MFB between January 31 and February 4, 2011.

On the need to engender depositors’ confidence in line with its mandate, the statement said that the corporation had continued its routine examination of some of the MFBs.

It said, “The corporation has also concluded arrangements to prosecute the directors and other officials of the closed MFBs, who were involved in insider-related abuses, to serve as a deterrent to other bank directors and officials.

“Preliminary reports of the books and affairs of the 103 MFBs revealed that many of them were run aground by their directors and officials, who engaged in insider-related abuses such as outright stealing, granting of unauthorised credits and diversion of depositors’ funds.”

On depositors of failed MFBs who had not received their claims, the statement said, “Depositors of the 11 remaining MFBs will be paid as soon as their records are made available to the corporation.”

Source: Punch