The House of Representatives has called on the Central Bank of Nigeria (CBN) to suspend the April 2021 deadline for the proposed recapitalisation by MicroFinance Banks (MFBs) until the economy stabilises from the COVID-19 pandemic.
This follows the adoption of a motion by Sa’idu Musa Abdul during plenary on Wednesday. He said CBN had revised the timeline earlier by one year which ends this month.
Abdul said: “A survey conducted by the National Association of Microfinance Banks (NAMB), which indicated that out of 874 licensed MFBs, about 612 may be negatively affected by the recapitalisation policy.”
Citing the finding, he said only 30 percent of MFBs will be able to meet the April 2021 timeline while the rest may fold up and could cause more job losses as the 612 MFBs have about 44,800 staff.
CBN had reviewed the minimum share capital requirement of the three categories of MFBs in October 2018: a Unit MFB will raise its capital from N20 million to N200m; State MFB from N100m to N1 billion and a National MFB from N2bn to N5bn.
On March 18, 2019, CBN revised the directive allowing instalment payment for the Unit MFB in tiers 1 and 2. Tier 1 MFBs (Urban) are to raise N200m while tier 2 (Rural) are to raise N50m as against the initial N20m requirement.
The House mandated its Committee on Banking and Currency to interface with the CBN on the solution and revert within four weeks.