CBN Fixed N1m Loan Limit For Microfinance Banks
Abuja – Central Bank of Nigeria (CBN) issued a circular to all MfBs: “End of MfB’s illegal activities”.
A circular signed by Ibrahim Tukur, Director of the Fiscal Policy and Regulation Department, states that MFB operators are also strictly prohibited from conducting foreign exchange operations.
The Supreme Bank warned the MfB not to offer illegal activities, in particular foreign exchange and wholesale banking.
The regulator noted that it had noticed that some MFBs were engaging in illegal activities that pose a risk to the financial system.
The circular wrote: “The Central Bank of Nigeria (CBN) has been monitoring the activities of some MFBs, which are engaged in illegal activities, in particular wholesale banking, foreign exchange transactions and others, in order to obtain operating licenses.” ”
“Given MFB’s relatively low capitalization, wholesale and / or foreign exchange transactions pose a significant risk to the stability of the financial system, and all MFBs are required to comply with existing revised regulatory and supervisory guidelines. It became mandatory to be reminded to do so. Nigeria 2012 MFB (guidelines).
CBN focuses on financial companies that focus on providing financial services to retail and / or micro-customers, and microcredit and retail transactions exceed N500,000 per transaction for Tier 2 MFB units and more than N1 million units. NVP for other categories.
In addition, microcredit instruments will account for at least 80% of MFB’s total loan portfolio.