JUMADA-AWWAL 3, 1429 A.H.
FRIDAY, MAY 9 2008
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CBN warns MFBs against defaulting on returns
The CBN Governor, Prof. Chukuma Soludo, yesterday in Abuja warned Micro Finance Banks (MFBs) to ensure regular monthly returns on their operations or risk losing their licences.
The CBN has mid-wived the birth of 752 MFBs in three months to fight poverty, but their operations continued to attract criticism, especially on alienating the poor.
Soludo said at a meeting with the MFBs that only 428 out of the 647 expected to file in returns in February, complied.
He inaugurating an MFB Committee to oversee the operations of the institutions, adding that the delay in filing the reports was unacceptable.
To curb the trend, he said “persistent failure to render returns for up to six months in a year was a ground for revocation of an MFB licence.’’
“In addition to the monetary penalties for late submission, false, or non-submission, as stated in the guidelines of the MFB, the Managing Director of the defaulting MFB shall be suspended for one month.
“For subsequent default, the Managing Director shall be removed and blacklisted, ‘’ he said.
The CBN governor, who was represented by the Deputy Governor on Other Financial Institutions, Mr. Tunde Lemo, urged the MFBs to set up Management Information.
According to him, the MIS will facilitate prompt and accurate rendering of monthly returns.
“Your MIS should also be compatible with the CBN’s Electronic Financial Analysis and Surveillance System (e-FASS), this is because in future, online rendition will be the only way to go, ‘’ he said.
On branding, the CBN governor discouraged the use of
business names without the appropriate designation of being MFBs, not commercial banks.
“My attention has been drawn to the way some MFBs are branded; some play down the word ‘Micro Finance’ in their approved names.
“Accordingly, all MFBs are required to ensure that their official names as approved by the CBN and registered at the Corporate Affairs Commission (CAC), are written on their sign boards, letter headed papers and all banking instruments, ‘’ he said.
In an interactive session with newsmen, the CBN Director in Charge of Development Finance, Mr Sam Oni, said some of the MFBs had derailed from the philosophy of providing credit to the less privileged.
Oni said the apex bank would correct the anomaly by organising capacity building training that would remind operators of the philosophy of establishing the institutions.
An operator of the MFBs, Mr Jude Nosagie, said the branding of the MFBs was intended to differentiate the various operators.
Nosagie, who is the Managing Director of Prosperity Micro Finance Bank, said the MFB had attracted more than 15,000 customers in the last three months.
