Central Bank of Nigeria - Revised Regulatory and Supervisory Guidelines For Microfinance Banks (MFBS) In Nigeria

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The potential of micro finance in poverty reduction, economic growth and development coupled with the emergence of fast growing micro finance institutions (MFIs), has effectively put the issue of micro finance on the political agenda of most developing countries. Consequently, the supervisory authorities have taken active measures to ensure an efficient and effective micro finance delivery through the development of an appropriate regulatory and supervisory framework, based on the peculiar features and associated risks.

These Guidelines recognize the distinctiveness of micro clients, ownership structure of the institutions, their credit methodology, and the central position of savings/deposits in the intermediation process. It also adopts measures to ensure the soundness and safety of the institutions, and the protection of depositors, especially low-income clients. Also, it defines institution types, loan documentation, portfolio classification, loan loss provision and write-offs, amongst others, and provides the basis for the establishment, operations, regulation and supervision of micro finance banks, and institutions. The guidelines cover the following topics:

1. Permissible and Prohibited Activities
2. Ownership and Licensing Requirements
3. Board and Management
4. Funding Accounting and Related Matters
5. Compliance with Money Laundering (Prohibition) Act 2011, Terrorism (Prevention)
6. Publication and Audited Financial Statement
7. Prudential Requirements
8. Assessment and Soundness
9. Requirements for Increase In Share Capital
10. Disclosure and Interest by Directors and Officers and Mfbs
11. Disclosure and Required Information to Credit Reference Bureaux
12. Operational Requirements and Controls
13. Appointment and Chief Executive/Principal Officers and External Auditor
14. Scheme and Arrangement
15. Restructuring and Re-Organization
16. Transformation and Other Institutions To Micro Finance Activities
17. Collaboration to Regulate Deposit/Savings Mobilizing Institutions
18. Conditions for Revocation and License
19. Exit Conditions
20. Recommended Minimum Operational Template for Micro finance Banks in Nigeria

Document Details

Document Type: 
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Year of Document: 
2012
Date of Document: 
Tuesday, December 18, 2012
Document Authors: 
Central Bank of Nigeria
Language (This Document): 
English

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